More Doctors Leaving Private Practice, Working for Hospitals

Significant changes are occurring in medical practice ownership, and the COVID-19 pandemic may have fueled some of the shift. The American Medical Association (AMA) has released a report showing that from 2012 to 2022 the share of physicians working in private practices fell 60.1% to 46.7%, a drop of 13 percentage points. In contrast, the proportion of physicians working in hospitals as direct employees or contractors increased from 5.6% in 2012 to 9.6% in 2022.

The analysis is part of the latest addition to the AMA’s Policy Research Perspective series that examines long–term changes in practice arrangements and payment methodologies. The AMA’s Physician Practice Benchmark Surveys are nationally representative surveys of post-residency physicians who provide at least 20 hours of patient care per week, are not employed by the federal government, and practice in the 50 states or the District of Columbia.

The latest survey was conducted from September to November 2022. Final data included 3500 physicians with a response rate of 31%.

The survey showed that the share of physicians working in practices at least partially owned by a hospital or health system increased from 23.4% in 2012 to 31.3% in 2022.

The proportion of physicians in small practices (10 or fewer physicians) shrank from 61.4 % in 2012 to 51.8% in 2022, the survey revealed. During that same period, the share of physicians in large practices (at least 50 physicians) grew from 12.2% to 18.3%. The proportion of physicians in midsized practices (11 to 49 physicians) remained relatively stable.

“In my opinion, the pandemic radically changed how physicians managed their practice because of the demands placed upon them by telemedicine, increased overhead costs, decreased reimbursement, and lack of staffing,” said Jason S. Greis, JD, a partner with the law firm of Benesch, Friedlander, Copland & Arnonoff LLP in Chicago, Illinois, where he is part of the firm’s Health Care & Life Sciences Practice Group. “Due to frustration, many physicians have accelerated the movement from privatized medicine to corporatized medicine backed by private equity and large hospital and health system acquirors.”

In 2022, single-specialty practices accounted for the largest share of physicians (41.8%), followed by multi-specialty group practices (26.7%), solo practices (12.9%), and a direct employment or contracting relationship with a hospital (9.6%). From 2012 to 2022, the number of physicians in multi-specialty practices and those with a direct employment or contracting relationship with a hospital grew by about 4%. The number of physicians in solo practices decreased 4%, and it was the same for single specialty group practices.

“I believe that physicians need to come together and merge into large multi-specialty practices to take advantage of cross-referrals in a way that complies with applicable federal and state fraud and abuse statutes,” Greis said.

This article originally appeared on Renal and Urology News