Physician ownership of practices falls below 50%

In a study of physician practice arrangements, the American Medical Association (AMA) found the long-term trends of consolidation and increased physician employment have continued, with the majority of physicians no longer having an ownership stake in their medical practice.

Using data from the AMA’s Physician Practice Benchmark Surveys, the association found 47.1 percent of post-residency doctors who practice at least 20 hours of patient care per week have an ownership stake in their practice. That’s down from 53.2 percent in 2012, and marks the first time the majority of physicians surveyed didn't at least partially own their practice.

An equal share of physicians, 47.1 percent, reported being in employed positions in 2016, up from 41.8 percent in 2012. 5.9 percent reported being independent contractors.

The AMA didn't portray the results in a negative light, arguing it could reflect younger doctors’ preferences, with 65.1 percent of physicians under the age of 40 being employees in 2016.

“Patients benefit when physicians practice in settings they find professionally and personally rewarding, and the AMA strongly supports a physician’s right to practice in the setting of their choice,” said AMA President Andrew Gurman, MD. “The AMA is committed to helping physicians navigate their practice options and offers innovative strategies and resources to ensure physicians in all practice sizes and setting can thrive in the changing health environment.”

Despite the drop in the share of physicians having an ownership stake in their own practice, most physicians (55.8 percent) still work in practices owned by physicians. That figure includes physicians who are employed or work as independent contractors who work for physicians with ownership stakes.

Among the other findings in the study:

• Practice size is increasing, with 57.8 percent of physicians working in practices with 10 or fewer physicians in 2016, down from 61 percent in 2012. Practices with at least 50 physicians increased their share from 12.2 percent of doctors in 2012 to 13.8 percent in 2016. Solo practice declined from 18.4 percent in 2012 to 16.5 percent in 2016.
• Hospital ownership of practices or direct employment of physicians has stalled. The percentage of physicians in those arrangements has remained the same, 32.8 percent, since 2014.
• Practice arrangements varied widely across specialties. Surgical sub-specialties had the highest share of physicians who were owners (59.3 percent) followed by radiology (56.3 percent). Emergency medicine physicians had the lowest share of ownership (27.9 percent), but the highest share of independent contractors (24.8 percent). The greatest share of employed physicians came from pediatrics (58.3 percent).
• Practice type was also quite different among specialties. 24 percent of both general internists and family medicine were in solo practice in 2016, while fewer than 10 percent of radiologists, pediatricians and emergency medicine physicians were in solo practices. Additionally, radiologists were the most likely to work in single specialty practices (58.4 percent).