The state of private practice operations in 2025

Independent practices face a unique set of challenges like rising costs, complex billing, patient retention, and operational demands, to name a few. Yet, despite these hurdles, the strategies that successful large practices use to overcome them are often inaccessible to many smaller practices.
To bridge this gap, we launched the Private Practice Benchmarking Survey to uncover actionable insights into the current state of independent practices and provide practical solutions tailored to their needs. By gathering input from 122 small private practice owners, we identified 4 key areas where practices can find — and are finding — success:

Even though the state of independent practices is complex — there's a clear path forward for those who are willing to adapt and innovate. If you're a practice owner, manager, or operational leader, let's explore how you can streamline operations and improve revenue.

Successful practices don't chance upon success. They find ways to increase revenue by acquiring new customers or expanding revenue with existing ones. Adding ancillary services is an excellent way to do the latter.

Our research found that 28% of surveyed practices haven't explored this potential revenue stream. It's a significant opportunity, considering that 70% of practices that have already added such services say it's easy to do so. In fact, most of them start out with services that patients need the most, such as:

These services are a natural extension of standard care pathways. Lab work or nutritional/pain management services complement your current diagnostic and treatment processes. You can help address unmet patient needs — and patients prefer the convenience of getting everything done in the same place. It’s a win-win for everyone involved.

The services you choose will depend on your practice's specialty. For instance, primary care practices favor lab and ECG services, mainly due to their role in preventive care and chronic disease management. However, mental health practices prioritize addiction medicine services, with 34% of these practices already providing them.

We also found that 56% of mental health practices don't offer ancillary services at all, missing out on multiple opportunities for revenue growth.

But what happens when you add more revenue lines? From our findings, the revenue impact is evident quickly. In fact, 28% of practices that added new services saw a revenue increase within 30-59 days. But the financial returns can vary significantly. While 30% of practices generate up to $10,000 annually from these services, another 34% report earnings exceeding $100,000. This latter group is likely pulling growth levers such as more patients or high return on investment (ROI) services to increase revenue.

The most successful practices start by assessing their patient needs and demographics. Talk to your existing customers and ask them what they want from your practice. Is it a new diagnostic service or pharmacy services? Depending on the answers, check to assess against these factors:

If the bill fits, introduce the offer but take a very measured approach. Identify a single service with clear demand among your current patients — consider starting small with a high-ROI service like lab testing. Then plan for minimal initial hours, and ensure the service aligns with your daily workflow to minimize disruptions. After that, scale based on utilization data.

The difference between a thriving practice and one struggling with cash flow often comes down to billing efficiency. In our survey, 69% of practices collect payment at the time of service, while 64% stay on top of coding updates and hire trained front desk staff to reduce insurance rejections.

This makes a huge difference. If you collect payment upfront or at least right after the patient completes their consultation, you don’t have to worry about cash flow. Even in the case where you have to file a claim with the patient’s insurance company, your front desk staff are trained enough to catch filing and billing errors as and when they occur. In fact, practices that do these things have reduced their rejection rates by a median of 20%. And 33% of practices implementing strict billing protocols saw increased reimbursements within 59 days of implementation — indicating that efficient billing processes are crucial for maximizing reimbursements and avoiding payment delays.

The most successful practices have shifted from a reactive to a preventive billing strategy. Our data shows that 69% of practices now verify insurance before visits — while 64% have invested in training their front desk staff to handle insurance verification and payment collection.

If you want to improve your billing process, consider these steps:

It's no surprise that patient acquisition and retention costs are through the roof nowadays. Depending on your practice's specialty, it can cost anywhere between $155 to $582 to acquire one new patient. So, leaky buckets like patient no-shows and cancellations will only drain your revenue, considering how hard it is to get a patient's foot in the door.

Our survey reveals that 31% of practices lose over $7,500 annually due to missed appointments alone. And this figure doesn't account for the additional costs of acquiring new patients to fill these gaps.

There are also large operational issues that need to be addressed, which include:

So, how do you address these issues? According to respondents, here are the tactics that worked the best to lower patient acquisition costs:

Here are some recommendations to lower PAC:

Retention strategies, like reducing cancellations and strengthening patient-provider relationships, are key to providing quality care and gaining practice profitability.

Sustainable practice growth doesn't just rely on revenue generation — it also factors in strategic cost management. At the moment, practice owners say that staff wages, provider salaries, and office space are their most significant expenses. Provider salaries represent the highest expense for 47% of practices, creating a situation where nearly two-thirds of operating costs are tied to human capital.

However, one of the most revealing findings about top operating costs has to do with billing management. Seventy percent of practice owners maintain in-house billing operations — with mental health practices showing the strongest preference (78% of mental health practices). They do so for reasons beyond cost. In our survey, 76% of owners prefer direct control of their billing and 56% have an excellent in-house team to tackle this area.

However, practices that outsource also report compelling benefits. 78% of owners eliminate expenses associated with staffing, and 68% of them point to easier regulatory compliance. This indicates that the choice between in-house and outsourced billing is about operational efficiency — not just cost.

When you're deciding which option to choose, assess the potential ROI for both. If billing companies are too expensive, consider choosing automated tools for billing and scheduling. With the advancement in artificial intelligence (AI), practices may find it easier than ever before to find automated billing software they feel comfortable with. Also, conduct a regular assessment of staff burnout and productivity. If your in-house medical billers are burnt out, they're more likely to make billing errors, which can also cost you more money down the line.

Find solutions that allow you to cut costs without losing efficiency. Controlling overhead costs while improving operational workflows is critical for sustainable growth.

Independent practices that take a proactive approach to improving their operations succeed in the long term. It’s the key to surviving for years — and becoming the preferred option for patients.

You can use a platform like Tebra, which has all the features your practice needs to attract and retain patients, grow revenue, and offer a better patient experience.

You can start by identifying areas for improvement using Tebra’s Practice Revenue Analytics feature. It shows you how and where you’re spending money while uncovering hidden opportunities for revenue growth. For instance, if you’re making too many referrals for diagnostic services, it may be time to set these services  up internally.

With Tebra's medical billing solution, you can also enroll, submit, track, and reconcile claims, all from one platform. Tebra also allows you to verify insurance eligibility in real-time and give you a clear idea of what's covered and a patient's payment responsibilities. It also lets you automate billing by sending patient statements and reminders as needed to recover payments faster. This way, your cash flow improves over time.

If patient acquisition or retention is at the top of your mind, we can help you there, too. You can use our Practice Growth features to optimize your website for search engines and attract patients who need your service. You can even install an appointment scheduler to simplify the booking process and automate reminders to reduce cancellations or no-shows.

Independent practices have a huge advantage in today’s market. They provide more cost-effective, efficient, and personal care to patients. If they pull the right levers, it’s possible to increase revenue and improve patient experience with the right tools and strategies.

This report draws insights from a comprehensive survey of 122 private practice owners conducted in September 2024. We saw a balanced distribution across specialties:

In our study, most respondents had small practices with one to four providers (56%). Specifically, 30% are solo practitioners, while 26% have two to four providers. Mid-sized practices with five to nine providers comprise 24% of respondents and larger practices with 10 or more providers make up the remaining 20%.

When it comes to the financial profile of these practices, the majority of them reported their annual revenue between $1 million and $5 million (34%). 42% of practices reported revenues under $1 million and 24% of practices generate over $5 million annually.

Our survey captured insights from practice owners who lived across the United States. Here’s the data composition:

The gender distribution shows 69% men and 31% women — while the age distribution leans toward experienced owners, as 54% of owners are 55 years or older, while 21% are under 45 years of age.

As a result, Baby Boomers lead practice ownership at 44%, Generation X at 36%, and Millennials at 20%.