Independent practice is an uphill battle across specialties as operational costs, reimbursement declines and other challenges continue to pile up.
Michael Warne, CEO of Associated Gastroenterologists of Central New York in Camillus, joined Becker’s to outline some of the struggles and successes of independent practices in 2025.
The challenges
Labor and operational costs. Like many practices across the U.S., Mr. Warne and AGCNY have had to manage spikes in both labor and operational costs.
“I can’t keep a front-desk person at $15 an hour, like medical practices were able to do 10 years ago,” Mr. Warne said. “No. 1, it’s unethical. I want to pay people what they deserve to be paid. This is very hard work. It’s stressful. People need to be compensated accordingly.”
Mr. Warne views his practice as more than a healthcare provider, but a true community stakeholder, which means supporting employees as community members through fair compensation.
“That comes, obviously, at a dollar cost. Where we’re not only healthcare providers, we’re employers, and we’re looking to support the community,” he said. “It’s just a simple fact of economics, in addition to the rising labor costs, operational expenses, the cost of EMR, the cost of postage, the cost of medical supplies, the cost of rent, the cost of typical utilities keeping the lights in the water running … it’s going up every year.”
The median investment per full-time physician at physician practices rose to $347,240 in April 2025, according to data from Strata Decision Technologies. This represents a 4.8% increase since 2024 and a 16.3% increase since 2023.
Anesthesia costs. “When we saw the rates for anesthesia now, compared to just as little as five years ago, it makes your eyes pop out of your head, and it’s tough to keep up with that,” Mr. Warne said.
This concern has been echoed by other ASC leaders, who have voiced concern over increases in anesthesia costs fueled by the ongoing shortage of anesthesia providers. By 2026, the U.S. is projected to face a shortage of 6,300 anesthesiologists, according to a 2024 white paper from Medicus Healthcare Solutions. Today, there are more than 7,700 people for every one anesthesiologist, and the workforce is aging — over 56% of anesthesiologists are older than 55, and more than 17% are nearing retirement.
Stagnant reimbursement rates. Mr. Warne said that while the cost of health insurance continues to climb, there has been no increase in reimbursement on the practice side.
“We’re not seeing that rate increase. We’re seeing the cost of health insurance for employers and patients skyrocketing, but our reimbursements are stagnant,” he said. “So it begs the question, where is all that extra money going?”
Over the last 20 years, reimbursement rates for screening colonoscopies, when considering inflation, have dropped by nearly 50%. On top of that, gastroenterologists specifically are feeling underpaid as salaries have struggled to keep up with rising inflation rates.
From 2001 to 2024, Medicare physician payment rates have declined by 29% when adjusted for inflation in practice costs, according to the American Medical Association, which underscores the growing mismatch between reimbursements and actual expenses. U.S. gastroenterologists saw a 3% decline in compensation from 2023 to 2024, with annual salaries dropping from $512,000 to $495,000, according to Medscape’s “Gastroenterologist Compensation Report 2025,” published May 16. Over the last 20 years, reimbursement rates for screening colonoscopies, when considering inflation, have also dropped by nearly 50%.
The triumphs
Meeting growing GI needs. AGCNY operates two office locations in Syracuse, N.Y., two ASCs and a pathology lab.
“For a mid-size city in the U.S., we are a very busy practice, and we see that the need for GI is growing. It’s getting crazy,” Mr. Warne said. “I think it has to do with the growing awareness behind the rising rates of colorectal cancer. Specifically, colorectal cancer in the younger population.”
A 2024 study found that among people ages 20-24, GI cancer cases increased by 185% from 0.7 per 100,000 people to 2 per 100,000 over 1999 and 2000. For people older than 25, the increases were smaller, with those ages 40-44 seeing the smallest increase of 45% (from 15 cases per 100,000 people to about 21 per 100,000).
Strong relationships with primary care offices. Mr. Warne said that the most important aspect of meeting the rise in GI care needs as an independent practice is “making sure that we have very good relationships with our referral basis and the primary care offices and in the region.”
“Our physicians are on what I call a texting basis with most of the primary care physicians in the area,” he said. “Not just primary care. Any specialist that has a GI concern with a patient that typically might take quite a while to get in. There is no question. They will call our docs up. They will send them a text. I’m also very involved—they have no problem calling my cell phone. We’re very unique and in the way we practice where we emphasize personalities and personal relationships, and we’re kind of able to transcend the official channels to get patients care they need.”
Small, tight-knit teams with a focus on patient experience. “We’re still considered a small business, and a small business naturally creates a very intimate atmosphere,” Mr. Warne said.
“I don’t want to do the old cliche, but like we’re a family, and everybody knows each other very well,” he added. “We see each other every day, oftentimes more than our own families. Everybody has each other’s back. If somebody’s having an issue, we don’t have a problem stepping in and helping them solve that. I have a very open door policy. It is not uncommon for anybody in the company to stop into the CEO’s office to vent, to look for words of encouragement … I care deeply about that.”
The bond and high level of communication among team members often enables practices like AGCNY to focus more closely on delivering cohesive, patient-centered care models while working around challenges within the healthcare system.
“Private practices like ours are laser focused on delivering high-quality, personalized care and building tight-knit community ties with other providers and patients, especially as colon cancer and other complications are on the rise,” Mr. Warne said. “Private practice [doctors] aim for high-prioritizing patients, working with our primary care colleagues, and pushing awareness. But, the system is no ally. Operational expenses are through the roof while reimbursements stay frozen. Despite the grind, private practices and ASCs are battling every single day to keep quality care first and stay independent in a brutal healthcare landscape.”
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