Physicians nationwide continue to move away from private practice and increasingly affiliate with hospitals or private equity groups, all while shifting from smaller to larger practice sizes.
That’s according to the American Medical Association’s most recent biennial Physician Practice Benchmark Survey, which attributed the change to “inadequate payment rates, costly resources, and burdensome regulatory and administrative requirements.”
The study revealed only 42.4% of physicians surveyed are working in private practices, defining those as practices wholly owned by physicians. By contrast, 60.1% of physicians were classified as private practice in 2012, the first year AMA conducted the study.
The pressures on private practices to remain viable helps drive the Texas Medical Association’s work with AMA in the ongoing national campaign to improve Medicare physician payment and reduce insurance-related burdens like prior authorization.
“When physicians are closing their doors because they can’t afford to keep them open, our patients lose access to physicians,” said Megan Kressin, MD, an Austin pathologist and chair of TMA’s Council on Member Experience. “It may sound like we’re focusing mostly on payments, but payments are what allow us to provide patient care.”
The AMA study also explored reasons physicians sold private practices, chronicling six reasons on a rating scale ranging from “not important” to “very important.”
The percentage of respondents answering either “important” or “very important” to each reason included:
- To better negotiate higher payment rates with payers: 70.8%
- To improve access to costly resources: 64.9%
- To better manage payers’ regulatory and administrative requirements: 63.3%
- To ease participation in risk-based payment models: 55.1%
- To better compete for employees in the labor market: 48.9%
- To increase availability of additional services that patients need: 48%
The study noted that less than half of physicians in most medical specialties now work in private practice settings, including cardiology (30.7%), general surgery (31.7%), and emergency medicine (33.2%). Family physicians match the private-practice ratio for all specialties at 42.4%, while 38.1% of pediatricians and 38.9% of internists identify as in private practice.
On the other end of the spectrum, 70.4% of ophthalmologists are in private practice, as are 54% of orthopedic surgeons and 51.2% of physicians in surgical subspecialties.
The study also found, in surveying 5,000 physicians nationwide, that the percentage of practices with 10 or fewer physicians has decreased – including a drop in those with five or fewer – from 40% in 2012 to 28.8% in 2024.
Conversely, practices with 50 or more physicians held steady from the 2022 report, jumping from 12.2% in 2012 to 18.3% in the most recent two surveys.
Ownership has also shifted significantly from the inaugural 2012 survey, when a majority of physicians surveyed (53.2%) had ownership stakes in their practice, compared to 41.8% who were employed. Now, a majority of physicians surveyed (57.5%) are employed, with those with ownership stakes in practices down to 35.4%.
The study also revealed an increase in physicians working in both hospital-owned (34.5%) and private equity-owned practices (6.5%).
A trend toward employment
The AMA study’s findings echoed the April 2024 Physicians Advocacy Institute/Avalere Health study, which showed that the share of employed physicians has risen both statewide and nationwide in recent years.
Though the study showed Texas leads the nation with 28% of practices being independent, it also showed a sharp drop in the number of independent practices between 2019 and 2024 – from 20,133 to 13,411 in that five-year span.
Over that five-year span, the ratio of employed physicians to all physicians rose from about five in eight to more than three in four. In Texas, those numbers climbed more sharply, going from just over half to approaching three in four.
Dr. Kressin says those changes are reflected in TMA putting forth more support for employed physicians as their ranks grow, including an employed physician resource page on the TMA website.
“We have been paying attention to the changing demographics of our physician members and the physicians in the state in general for many years now,” Dr. Kressin said. “We have a lot of offerings in the association for physicians in a variety of practice settings … and the more that we get together and talk to each other, we can see that there are commonalities in our issues.”
Visit the TMA site to learn how the association helps physicians in a variety of practice settings.
Phil West
Associate Editor
(512) 370-1394
phil.west[at]texmed[dot]org
Phil West is a writer and editor whose publications include the Los Angeles Times, Seattle Times, Austin American-Statesman, and San Antonio Express-News. He earned a BA in journalism from the University of Washington and an MFA from the University of Texas at Austin’s James A. Michener Center for Writers. He lives in Austin with his wife, children, and a trio of free-spirited dogs.