The last 10 years have seen a notable drop in the share of physicians who are independently employed.
From 2012 to 2022, the share of physicians who were self-employed dropped by 9% –– from 53% to 42%. At the same time, employed physicians grew from just under 42% to almost 50%, according to a 2023 American Medical Association release.
Not coincidentally during the same period, the size of private practices grew larger, as the share of physicians who worked in practices with less than 10 physicians dropped nearly 10%, while the share of those working at practices with over 50 physicians grew 6%.
Other reporting shows that of these employed physicians, many are working for practices that are health system- or corporate-owned. According to the Physicians Advocacy Institute and Avalere Health, 58.5% of practices are health system-or corporate-owned –– with corporations owning slightly more than health systems at 30%.
The shift is clear: physicians are moving to larger, conglomerated practices.
According to the AMA, for four out of five physicians, the need for better leverage in payer negotiations played a very important or important reason in the sale of their private practice to a hospital or health system.
Increasingly lower reimbursement rates –– paired with rising costs of doing business, have combined to have a damaging impact on independent practices. Physicians in the analysis also flagged the need to improve their access to costly resources and supplies and the need to better manage payers' regulatory and administrative requirements.
For many, this has amounted to an unbalanced financial equation.
“The AMA analysis shows that the shift away from independent practices is emblematic of the fiscal uncertainty and economic stress many physicians face due to statutory payment cuts in Medicare, rising practice costs, and intrusive administrative burdens,” said AMA President Jesse M. Ehrenfeld, MD.