Physician autonomy is a central concern for physicians and physician leaders heading into 2025, as just 44% of physicians owned their own practice in 2022, compared with 76% in the early 1980s, according to the American Medical Association.
Around 61% of employed physicians said they have moderate or no autonomy to make referrals outside of their practice or ownership system, and 47% said they adjust patient treatment options to reduce costs based on practice policies or incentives, according to a survey from NORC at the University of Chicago.
"This one factor makes physicians vulnerable to the whims of large corporations," Loay Kabbani, MD, a vascular surgery specialist at Detroit-based Henry Ford Health, told Becker's. "As physicians become more and more employed, we lose control of our practice and our patient-physician relationships."
Unfavorable reimbursement rates from both Medicare and private payers, paired with skyrocketing costs of operation amid inflation, are often factors pushing independent physicians toward employment.
The investment required to support a physician practice rose 8.8% year over year in October, reaching $332,887 per full-time equivalent physician, according to data from Strata Decision Technology. Median direct expenses per physician increased 9.8% year over year, hitting $1.1 million annually. Meanwhile, median annual net revenue per physician rose by 9.1% to $726,691.
Additionally, inflation, specifically in healthcare, continues to rise. The Medicare Economic Index, which measures medical practice cost inflation, increased 4.6% in 2023, the highest in the last 23 years.
"Many physicians face the challenge of effectively managing their practice's financial aspects," David Rosenfield, MD, anesthesiologist and interventional pain specialist at Peachtree City, Ga.-based Alliance Spine & Pain, told Becker's. "This includes dealing with insurance reimbursements, understanding complex billing codes and controlling operational costs. Every year, many of us find ourselves working harder and longer hours just to maintain our incomes. The costs of practicing medicine — rent, equipment, employee costs — continue to rise, while reimbursement often declines year over year."
However, a few factors point to possible relief for physician autonomy.
Reforms to prior authorization
Prior authorization is another administrative burden that many physicians feel stifles their autonomy.
According to Medscape's "'They're Awful and Impede Patient Care': Medscape Physicians and Prior Authorizations Report 2024," 86% of physicians feel that the time they spend processing prior authorization requests or appealing denials has led to delays in patient care. Another 61% said that patients frequently abandoned recommended treatments due to prior authorization delays.
In 2024, 10 states passed laws reforming the prior authorization process, including Colorado, Illinois, Maine, Maryland, Minnesota, Mississippi, Oklahoma, Vermont, Virginia and Wyoming.
Some payers have also moved to ease prior authorization burdens. On Oct. 1, UnitedHealthcare's national prior authorization gold-card program went into effect. The payer first announced the program in August and debuted its list of eligible procedures Sept. 1.
Additionally, Blue Cross Blue Shield of Massachusetts removed 14,000 prior authorization requirements for home care services for its 2.6 million commercial members.
In its recently proposed reforms to the Medicare Advantage and Part D programs for 2026, CMS is looking to "address concerns about the overuse of prior authorization" by clearing up definitions for internal coverage criteria, creating stricter transparency requirements for payers, ensuring enrollees are informed about their rights to appeal and collecting more data on initial coverage decisions and appeals.
Additionally, a bipartisan group of legislators has also reintroduced the Improving Seniors' Timely Access to Care Act, which would reform prior authorization requirements in Medicare Advantage plans. The American College of Gastroenterology has developed an advocacy tool to support this legislation.
Signs of return to independence
While around 77% of physicians have shifted away from independent practices and into employed models over the last decade, some are growing unhappy with employment and are pivoting back to private practice.
According to consulting firm Bain & Co.'s "Frontline of Healthcare Survey," which was highlighted in an October blog post, nearly 25% of physicians in health system-led organizations are contemplating a change in employers, compared to just 14% in physician-led practices.
Some surgeons and physicians are choosing to leave employed models to regain this control. Susan Baumgaertel, MD, an internal medicine physician in Seattle, worked and had ownership stake at The Polyclinic in Seattle, a multispecialty physician practice now owned by Optum, for 25 years.
As the practice grew, Dr. Baumgaertel felt an increasing lack of autonomy in her ability to make clinical or operational decisions in the best interest of her patients and staff, so she left The Polyclinic in 2021. Her new independent practice, myMDadvocate, serves as a multifaceted telemedicine and healthcare navigation hub.
Robert Bray Jr., MD, CEO and founder of Newport Beach, Calif.-based DISC Sports & Spine Center, told Becker's that physicians must "gain a position of power" in order to regain their independence and autonomy in a sustainable way.
"The only answer I have found, which is actually the basis of why I created our structure, is we take a bunch of private practice physicians and affiliate their corporations through a management contract," Dr. Bray said. "We're selling them a service, but what we're doing is we are negotiating as a whole with the insurer to get enough power bundled. We're able to put the surgeon first. It's giving the physician some say, in essence, by bonding together as a group."
Dr. Bray said that the strength of this strategy lies in the fact that the larger management contract is with other physicians, as opposed to "a couple of senior partners who are taking advantage of the junior guys coming in."
"That's happened to a lot of the groups we've seen. You need a 'physician-first' model. And we've found it's cost efficient to do this," he added. "We've left them their autonomy, but we're incentivizing them to make cost-efficient decisions, as opposed to just making a decision to survive price breaks because they've been squashed by declining rates. They get paid fairly. They still have to work hard, but it's still a very cost-efficient number."