Private practice ownership by physicians continues to decline

For the first time, employed physicians outnumber self-employed physicians, according to a 2018 benchmark survey from the American Medical Association (AMA). The findings underscore a long-time trend of shifting ownership across physician practices. Over the last several years, self-employed physicians have been on the decline.

In 2018, nearly half––47.4%––of all patient care physicians were employed physicians, up 6% from 2012. In 2018, 45.9% of all patient care physicians were self-employed, down 7 points since 2012. Seven percent of physicians were independent contractors.

However, the changes are not unprecedented. Between 1988 and 1994, the share of self-employed physicians fell 14%, according to older AMA surveys. In fact, the shift away from self-employed physicians took longer than expected, and forecasters with AMA cautioned that the trend may not continue indefinitely.

“Transformational change continues in the delivery of health care and physicians are responding by reevaluating their practice arrangements,” AMA President Barbara L. McAneny, MD, said in a statement. “Physicians must assess many factors and carefully determine for themselves what settings they find professionally rewarding when considering independence or employment. 

The majority of physicians, 54%, worked in physician-owned practices as an employee, owner or contractor, down from 60% in 2012. This trend is slowing, with more than half of the shift happening between 2012 and 2014. The share of physicians in solo practice dropped from 18.4% in 2012 to 14.8% in 2018. Over the same time period, the share of physicians working directly for a hospital or practice at least partly owned by a hospital increased. Direct employment by a hospital increased from 5.6% to 8%, with the share of physicians in hospital-owned practices increasing to 26.7%.

Older and male physicians were more likely to be owners compared to younger physicians and women physicians. For physicians under the age of 40, ownership was 25.5%, compared to 54.3% among physicians age 55 and older. More than half of men, 52.1% of men, were owners, while 34% of women were owners.

Of physicians who worked in physician-owned practices, 40% were small businesses with 10 or fewer physicians.

See the full benchmark survey here.