CHICAGO - Physicians continue to move away from private practices and increasingly
work at practices owned by hospitals or private equity groups, according to the
latest analysis from the American Medical Association (AMA). Physicians reported that
inadequate payment rates, costly resources, and burdensome regulatory and
administrative requirements are longstanding and important drivers of this change.
“The share of doctors working in practices wholly owned by physicians is unraveling
under compounding pressures,” said AMA President Bruce A. Scott, M.D. “The
cumulative impact of burdensome regulations, rising financial strain, and relentless cuts
in payment poses a dire threat to the sustainability of private practices. After adjusting
for inflation in practice costs, Medicare physician payment has fallen 33 percent over
the past quarter century, which has severely destabilized private practices and
jeopardized patients’ access to care. Payment updates are necessary for physicians to
continue to practice independently.”
According to the analysis, the share of physicians working in private practices in 2024
was 42.2 percent, a decline of 18 percentage points from 60.1 percent in 2012. Private
practices now account for less than half of physicians in most medical specialties,
ranging from 30.7 percent in cardiology to 46.9 percent in radiology. Exceptions
included orthopedic surgery (54 percent), ophthalmology (70.4 percent), and other
surgical subspecialties (51.2 percent).
In contrast, the share of physicians working in hospital-owned practices in 2024
increased to more than one-third (34.5 percent), an increase of 11 percentage points
from 23.4 percent in 2012. Twelve percent of physicians were employed directly by a
hospital (or contracted directly with a hospital), double the share (5.6 percent) in 2012.
In 2024, 6.5 percent of physicians characterized their practice as private equity-owned,
higher than the shares in 2020 and 2022, which were both around 4.5 percent, the
report noted.
Among independent physicians that sold their practices in the last 10 years to a hospital,
private equity firm, or insurer, the most cited reason was inadequate payment
rates (rated as important or very important by 70.8 percent of physicians). Next were
the need to improve access to costly resources (64.9 percent) and better manage payers’
regulatory and administrative requirements” (63.6 percent).
The new analysis is the latest addition to the AMA's Policy Research Perspective series
that examines long-term changes in practice arrangements and payment methodologies.
The new AMA study, as well as previous studies in the Policy Research Perspective
series, are available to download from the AMA website.
