In western Massachusetts this winter, Valley Medical Group — a 90-provider primary care practice with four sites and roughly 400 staff — chose to join an Independent Physician Association (IPA) rather than sell to a hospital system. The move follows a January round of layoffs that trimmed about 40 employees, and leaders say joining an IPA is aimed at strengthening negotiating power with insurers and stabilizing finances. Practice executives and outside experts say IPAs promise greater leverage for value-based contracts and a way to preserve clinical autonomy, but the model carries timing and scale risks. The decision reflects a broader national squeeze on primary care driven by low reimbursements, workforce shortages and pending policy changes.
Key takeaways
- Valley Medical Group serves tens of thousands of patients across four locations and has about 90 clinicians; in January it laid off 40 staff (10% of its workforce) amid financial pressure.
- AAMC projects a shortage of roughly 86,000 primary care physicians by 2036, a factor intensifying practice closures and consolidation.
- A JAMA report found a 20% rise in the number of people unable to find a primary care doctor over the past decade, signaling growing access problems.
- Many practices are merging with hospital systems for financial security; Valley opted instead to join an IPA to retain physician control and revenue.
- IPAs can negotiate value-based contracts that pay a per-patient budget rather than fee-for-service; successful models require sufficiently large patient pools to spread risk.
- Insurers such as Blue Cross Blue Shield of Massachusetts view physician-led IPAs as stabilizing for primary care but note that value-based returns can lag more than a year.
- Not all IPAs are independent — some are owned by hospitals or private equity — so governance and physician decision-making rights vary widely.
Background
Primary care in the United States has been under sustained financial pressure for years. Reimbursement rates for primary care services have generally lagged those for many specialties, and the fee-for-service framework rewards volume over prevention. The COVID-19 pandemic exacerbated staffing strains and operating losses at many small and midsize practices, accelerating a trend toward acquisition by larger health systems.
Workforce projections add urgency: the American Association of Medical Colleges (AAMC) forecasts a substantial shortfall of primary care physicians by 2036, driven by retirements and insufficient replacement rates. Parallel research published in JAMA documents rising difficulty for patients to find a primary care clinician, with a roughly 20% increase in people reporting they cannot secure one over the past decade. State-level analyses, including a 2025 Massachusetts health policy review, link part of the revenue shortfall to relatively low insurance reimbursements for primary care.
Main event
Valley Medical Group, a long-standing family medicine network in the Connecticut River valley, confronted that pressure directly. The practice — which offers on-site labs, imaging and vision care — announced in January that it had eliminated about 40 positions, largely support roles, in response to rising costs and squeezed contracts. Rather than accept acquisition by a hospital system, the group’s leadership opted to join Arches Medical, an IPA that pursues value-based contracting for primary care practices.
CEO Dr. Paul Carlan framed the choice as one about clinical control and financial stewardship. He told staff and local reporters that selling to a health system tends to dilute physician priorities and redirect revenue into hospital operations. Joining an IPA, he and other leaders say, should provide a path to stronger reimbursement and more predictable funding aligned with keeping patients healthy.
Arches Medical and other physician-led IPAs aggregate practices to negotiate with Medicaid, Medicare and commercial insurers. That aggregation can enable value-based arrangements in which a practice receives a per-member budget for care and shares savings if care is delivered efficiently. Insurers and some IPA leaders emphasize that savings accrue over time and require adequate patient panels to manage actuarial risk.
Analysis & implications
At stake are two linked problems: sustaining independent primary care practices and maintaining clinician decision-making. When practices are acquired by hospitals, physicians commonly become employees subject to system priorities and potential revenue diversion. That consolidation can preserve operational stability but may change care patterns and incentive structures. Physician-led IPAs aim to preserve independence while improving bargaining position, but outcomes depend on governance and scale.
Value-based contracts are central to the IPA strategy. By moving away from per-visit payment, these contracts reward prevention and team-based care — allowing tasks to be shifted to nurses, medical assistants and therapists — and can raise total practice income if managed well. However, value-based models expose practices to population health risk: a few high-cost patients can overwhelm savings if the patient pool is too small or risk adjustment is imperfect.
Insurers acknowledge a potential alignment of interests: they benefit from fewer avoidable hospitalizations and emergency visits, while practices can capture a share of system savings. Yet the transition requires upfront investment and often a lag of more than a year before returns materialize, creating short-term cash-flow problems. That timing explains why Valley Medical still had to reduce staff after joining an IPA.
Finally, the governance of IPAs matters. Not all IPAs are physician-owned or focused on primary care; some are controlled by hospitals or private equity and may prioritize different metrics. The durability of the IPA approach will depend on whether physician-led groups can recruit sufficient practices, ensure transparent decision-making, and secure contracts with fair risk-sharing and timely payments.
| Entity | Key figures |
|---|---|
| Valley Medical Group | 90 providers; ~400 staff; 40 layoffs (Jan 2026) |
| AAMC projection | ~86,000 primary care physician shortfall by 2036 |
| JAMA finding | 20% increase in people unable to find a primary care doctor in past decade |
The table summarizes the most-cited numerical context in this story: practice staffing and published workforce and access metrics. These figures illustrate both the local impact (layoffs at a large regional practice) and national trends (projected physician shortfall and growing access gaps).
Reactions & quotes
Supporters and critics framed the IPA move differently. Valley Medical leaders emphasized autonomy and long-term viability, while insurers highlighted the potential for stabilized access if primary care remains viable.
“Our [insurance] contracts don’t pay as well as we think they should. The cost of everything is going up.”
Dr. Paul Carlan, CEO, Valley Medical Group
Carlan used the comment to explain why the practice rejected a hospital sale and pursued collective bargaining through an IPA. He and other leaders see IPA membership as a way to negotiate higher, more predictable payments tied to outcomes.
“If independent IPAs can create the infrastructure support to make independent practice viable, then that’s a good thing.”
Karen Johnson, Vice President, American Association of Family Physicians
The AAFP vice president framed physician-led IPAs as one potential solution but warned members to vet governance and independence carefully.
“Value-based contracts can work, but you need a large enough pool to spread risk and patience for returns to show up.”
Lisa Glenn, Vice President, Blue Cross Blue Shield of Massachusetts
Representatives from insurers and IPA operators stressed that the model stabilizes primary care access for insured populations but requires scale and upfront investment.
Unconfirmed
- The precise financial timeline for when Valley Medical will recover full staffing levels under IPA membership is not confirmed and depends on future contract performance.
- The full fiscal impact and timing of the Republican-backed Medicaid cuts referenced in state analyses are contingent on legislative implementation and are subject to change.
- The extent to which physician-led IPAs nationally can scale quickly enough to offset widespread primary care consolidation remains uncertain.
Bottom line
Valley Medical’s choice to join an IPA rather than sell to a hospital system illustrates a growing strategy among primary care practices seeking to preserve clinician autonomy while improving financial sustainability. IPAs can unlock value-based contracts that reward prevention and team-based care, but they require sufficient scale, transparent governance and patience for delayed returns.
For policymakers and insurers, the core policy challenge is to ensure payment models and transitional supports reduce the short-term cash-flow risks that force layoffs and acquisitions. For patients, the near-term concern remains access: whether local practices can sustain staff and appointment availability while transitioning payment models. The coming months and years will test whether physician-led IPAs can be a durable counterweight to consolidation or whether broader policy changes will be needed to secure primary care nationwide.
Sources
- NPR — reporting partnership (media)
- New England Public Media (local media partner)
- KFF Health News (media/health policy reporting)
- Association of American Medical Colleges (medical association, workforce projection)
- JAMA (peer-reviewed medical journal)
- Massachusetts Health Policy Commission (state policy body)
- Blue Cross Blue Shield of Massachusetts (insurer)