On May 15, 2026, CommonSpirit Health, the 137-hospital Catholic nonprofit system, reported a $578 million operating loss for fiscal Q3 [1]. The operating margin came in at -5.8%. Even after stripping out a $2.5 billion charge tied to the wind-down of its revenue-cycle outsourcing partnership with Tenet Healthcare, the underlying number is still bad. Year-to-date, the system has posted a $743 million operating loss across nine months, a -2.4% operating margin. Operating expenses grew from $10.1 billion to $10.6 billion year over year. Operating revenues stayed flat at $10 billion.
CommonSpirit is not an outlier. In Q1 2026, healthcare Chapter 11 filings ran 33% higher than the same quarter a year earlier, according to data from Gibbins Advisors [2]. Epic Systems now controls 43.7% of the acute-care electronic health record (EHR) market, up from 42.3% in 2024, while Oracle Health lost 56 hospitals last year, its third consecutive year as the largest net loss in the category [3]. The picture across the hospital-system layer of American healthcare is one of revenue stagnation, expense growth, payer disputes, and EHR consolidation pressure.
For employed primary care physicians (PCPs), this matters in practical terms. When a hospital system loses $578 million in one quarter, the system looks for cost reductions. Primary care, which has historically operated as a loss leader at the system level (referrals out to higher-margin specialty and inpatient services subsidize the primary care line), is one of the first places leadership reviews. Compensation gets restructured. Panel sizes go up. Time per visit goes down. Relative value unit (RVU) targets get raised. The administrative load grows because the system needs to capture every billable code to defend its remaining margin.
If you are an employed MD or DO in primary care, the question worth thinking about in 2026 is not whether hospital-system pressure will translate into pressure on your daily practice. It already has. The question is what your realistic alternatives look like, what the economics actually are, and what timeline you would need to walk through any of them.
What is driving the hospital-system stress
The CommonSpirit press release used two phrases worth pulling out: "industry-wide pressures" and "ongoing challenges with payers related to payment delays." Translated, the system is naming three structural problems [1]:
Supply & Labor costs are growing faster than reimbursement. Hospital input costs (labor, drugs, devices, supplies, technology) compounded at roughly 5-7% through 2024 and 2025, while commercial and government reimbursement growth has trailed.
Case mix and acuity are softening. CommonSpirit's volume metrics were up year over year (3.2% for the quarter, 4.3% year-to-date), but the patient mix paid less per encounter. Average length of stay dropped from 4.83 to 4.7 days for the quarter.
Payer mix worsened and payment delays got longer. Commercial payers have been more aggressive on prior authorization denials and payment timing. Some of those denials end up resolved, but the working-capital impact during the dispute window is material.
These pressures are not specific to Catholic nonprofits. They are visible in nearly every system's earnings releases this year. The Healthcare Chapter 11 trend, up 33% in Q1 2026, suggests the stress is reaching the breaking point for the systems that were already running thin [2].
The Epic side of the story is its own pressure point. Epic now sits inside 43.7% of acute-care hospitals, and the company's market share is growing primarily through small and mid-size hospital wins (organizations with 2 to 10 hospitals each) [3]. For employed primary care physicians inside an Epic system, that means even more standardized workflows, more documentation requirements, more inbox volume from MyChart messages, and more pressure to hit panel and RVU benchmarks that are calibrated against Epic's reporting. Oracle Health customers face an EHR migration most of them do not want, with 30% of sampled organizations saying Oracle is "not part of their long-term plans" and another 35% saying they want to leave but cannot [3].
The cumulative effect on the physician at the patient-facing edge of these dynamics is predictable. Less autonomy. More administrative time per clinical hour. Compensation that grows more slowly than the cost of running a household.
The three realistic exit paths from employed primary care
Physicians considering an exit from a hospital-employed PCP role in 2026 have three structurally different options. Each has different capital requirements, different timelines, and different patient-base profiles.
Path 1: Direct primary care (DPC). DPC practices charge patients a flat monthly or annual membership and do not bill insurance for primary care services. Panels run up to 800 patients per doctor (versus 2,000 to 2,500 in traditional insurance-based primary care). Memberships typically run $50 to $200 per month, or roughly $600 to $2,400 per year. The model has scaled meaningfully on the employer side: as of 2025, Hint Health platform data identified more than 7,200 employer contracts and 1.2 million members on DPC arrangements [4]. The American Academy of Family Physicians (AAFP) 2024 survey put the employer-contract figure at 9% of DPC practices, a number that has roughly tripled since 2020 [5].
Path 2: Concierge medicine. Concierge practices charge an annual or monthly retainer in exchange for a small panel (under 300 patients per doctor) and expanded access, typically including 24/7 physician contact, longer appointments, and direct coordination with specialists. The annual cost ranges from $3,000 to over $40,000 per year, depending on the tier. Entry-tier practices like The Cove Concierge Medicine in Castle Rock CO charge $2,500 to $5,000 per year. Premium-tier practices like WVL Synergy in Naples FL charge $5,000 to $12,000. Ultra-premium practices like MD² and Private Medical routinely charge over $40,000 per year per patient.
Path 3: Traditional independent practice. A physician can leave an employed system to join or open a small independent group that still bills insurance the conventional way. This path has shrunk meaningfully since 2010. American Medical Association (AMA) data shows the share of physicians who are practice owners fell to 42.2% in 2022, down from 53.2% in 2012 [6]. Independent practice in 2026 means dealing with payer negotiations, billing infrastructure, prior authorization, and the same administrative burden that drives system-employed physicians toward burnout, but with the upside of clinical autonomy. It is harder to scale than DPC or concierge.
The economics of each path differ in ways that matter for any physician evaluating the move.
The economics of going independent
A simplified comparison, using the canonical NextMD model ranges and conservative assumptions:
Model | Panel size | Per-patient annual revenue | Gross revenue at full panel |
|---|---|---|---|
Traditional employed PCP | 2,000 to 2,500 | varies (insurance-billed) | ~$250,000 to $350,000 W2 comp |
Direct primary care | up to 800 | $600 to $2,400 | $480,000 to $1.9M |
Concierge (Entry) | under 300 | $2,500 to $7,000 | $750,000 to $1.5M |
Concierge (Premium) | under 300 | $7,000 to $40,000+ | $1.5M to $4M |
These are gross revenue numbers, not take-home. Independent practice carries real expenses (rent, malpractice insurance, staff, EHR, billing or membership administration, marketing) that consume 35 to 60% of gross. But the upside profile is structurally different from W2 compensation: revenue scales with patient relationships you build, not with the system's compensation grid.
The hardest part of going independent is not the practice setup. It is the panel rebuild. A physician leaving an employed role does not own the patient list and cannot bring it to a new practice without legal exposure under most employment contracts. The new practice has to attract patients from scratch, which is why the model that scales fastest (DPC) often partners with employers from day one rather than building patient-by-patient.
This is where the demand side of the equation matters. Hospital-system financial stress is producing more "I lost my doctor" patient events. When a system consolidates a primary-care division, restructures a clinic, sells an outpatient practice, or migrates EHRs, the patients at that point of care become available to look for a new physician. Google Search Console data from the NextMD directory shows that 45% of organic search clicks land on individual doctor profile pages, suggesting patients are actively searching by physician name rather than by network. That search behavior is consistent with patients whose existing physician is no longer reachable.
What is different about 2026
Three structural shifts make the independent path more viable than it has been in any recent year:
First, distribution is no longer the bottleneck for patient acquisition. Independent practices used to depend on word-of-mouth, hospital affiliation, and insurance-network listings to fill panels. In 2026, marketplace directories, organic search, and DPC employer-channel contracts give independent practices distribution that was not available a decade ago. NextMD's directory alone tracks roughly 4,649 practices and over 7,100 physicians on the platform.
Second, employer demand for membership-based primary care is real and growing. Mid-size companies have begun contracting directly with DPC and concierge practices for their employee benefits, in part because traditional insurance is expensive and unsatisfying for many employers.
Third, hospital-system financial pressure is producing both a supply and a demand tailwind at the same time. Stressed hospitals push physicians toward exits and push patients toward searching for new doctors. The two effects compound. A physician who leaves an employed role in 2026 walks into a market with more available patients than the same exit would have produced in 2020 or 2021.
How to think about the decision
If you are considering starting your own concierge practice, I personally help many practices at all stages and am happy to work with you. Contact me here
The question is not whether independent practice is viable. It is whether the specific physician evaluating the move has the right runway, risk tolerance, and patient relationships to make the math work. A pragmatic decision frame:
Personal financial runway. Most independent practice transitions take 12 to 24 months to reach steady-state cash flow. A physician with 6 months of household expenses in reserve plus a clear plan for the transition period is in a stronger position than one without that buffer.
Existing patient relationships and referral networks. Physicians with deep ties in their geography (10+ years in the same metro, strong specialist referral relationships, recognized name in the community) have a faster path to a full panel than physicians who would need to rebuild from a cold start.
Model fit. DPC works well for physicians who want broad family-medicine practice with employer-contract distribution. Concierge works well for physicians whose existing patients skew higher-income or whose clinical interest is longitudinal care of complex chronic conditions. Traditional independent works for physicians comfortable with insurance billing infrastructure.
Geography. Some metros support concierge density well (Naples, Beverly Hills, Greenwich, Aspen, parts of Manhattan); others lean toward DPC (Tennessee, Texas, parts of the Midwest). The Nashville concierge and DPC market report and the DC metro market report show what those regional dynamics look like in detail.
Time horizon. A physician five years from retirement has different math than one ten years into a 30-year career. The longer the remaining horizon, the more the compounded autonomy and revenue growth of independence matter.
Sources
Muoio, D. (2026). Supply costs, payer challenges drag CommonSpirit Health to -5.8% operating margin in fiscal Q3. Fierce Healthcare. Read on Fierce Healthcare
Fierce Healthcare staff. (2026). Healthcare Chapter 11 filings up 33% in Q1 2026. Fierce Healthcare (citing Gibbins Advisors data). Read on Fierce Healthcare
Landi, H. (2026). Epic grows EHR footprint among small health systems even as overall market sales decline in 2025. Fierce Healthcare (citing KLAS Research 2025 EHR market share report). Read on Fierce Healthcare
Hint Health. (2025). Direct Primary Care Employer Trends Report 2025. Hint Health.
American Academy of Family Physicians. (2024). Direct Primary Care Practice Profile Survey 2024. AAFP. Find on AAFP
American Medical Association. (2024). Policy Research Perspectives: Physician Practice Arrangements Through 2022. AMA. Find on AMA
Source Attribution
Inspired by: weekly-news-updates/2026-05-17/strategic-takeaways.md (Thread 3)
Medical claims verified against: pricing-tiers-and-model-comparison, panel-size-standards, nextmd-business-context
Review Notes
Three Sources URLs flagged : Hint Health Employer Trends 2025, AAFP DPC survey 2024, AMA Physician Practice Arrangements 2024. User should confirm canonical landing pages before push to live.
Practice examples used: The Cove Concierge Medicine (Entry), WVL Synergy (Premium), MD² and Private Medical (Ultra). Brentwood MD intentionally avoided per(10+ published mentions).
Internal links: 5 total (3 NextMD blogs + 1 NextMD homepage + 4 practice pages on first mention).
Word count: ~2,000 words body, ~750 words FAQ, ~2,750 total.