AMA Data: Physicians in Private Practice Continue to Decline

In 2020, less than half of doctors worked in a practice wholly owned by physicians for the first time, according to American Medical Association data.

The historical shifts toward larger physician practices and away from physician owned practices accelerated between 2018 and 2020, according to a new American Medical Association data report.

Once a mainstay of the U.S. healthcare system, small physician practices are dwindling in number. In addition, the number of physician practices owned by hospitals or health systems is on the rise.

The new AMA data report is based on information collected in the organization's Physician Practice Benchmark Surveys. The surveys are nationally representative and collect data from post-residency physicians who provide at least 20 hours of patient care weekly. The surveys have been conducted every other year since 2012.

The new report includes several key data points:

• In 2020, 49.1% of physicians worked in a private practice, marking the first year that less than half of doctors worked in a practice wholly owned by physicians. In 2018, 54.0% of physicians worked in a private practice. In 2012, 60.1% of physicians worked in a private practice.
   
• There has been an ongoing shift from physicians owning practices to physicians working as employees. In 2020, 50.2% of physicians were employees. In 2018, 47.4% of physicians were employees. In 2012, 41.8% of physicians were employees.
   
• Gender and age are correlated with the likelihood for a physician to be employed, with female doctors and younger doctors more likely to be employed than male doctors and older doctors. In 2020, 56.5% of female doctors were employed compared to 46.7% of male doctors. In 2020, 70.0% of doctors under age 40 were employed compared to 42.2% of doctors who were 55 and older.
   
• The percentage of physicians working in small practices has fallen steadily. In 2020, 53.7% of physicians worked in practices with 10 or fewer doctors. In 2018, 56.5% of physicians worked in practices with 10 or fewer doctors. In 2012, 61.4% of physicians worked in practices with 10 or fewer doctors.
   
• The percentage of physicians working in large practices has been rising. In 2012, 12.2% of physicians worked in practices with at least 50 doctors, with the numbers increasing to 14.7% in 2018 and 17.2% in 2020.

Interpreting the data

Physicians appear to be shifting from private practice to working at hospitals and health systems, the AMA data report says. "As the number of physicians in private practice has fallen, the share of physicians who work directly for a hospital or for a practice at least partially owned by a hospital or health system has increased, changing from 29.0% in 2012 to 39.8% in 2020."

There is an established trend of fewer physicians owning practices and more physicians working as employees, the report says. "The changes between 2012 and 2020 reflect the continuation of a longer-term shift from physicians as practice owners to physicians as employees of practices or of other organizations."

There are several possible ways that physicians have shifted to larger practices and practices owned by hospitals or health systems, the report says. "These include mergers and acquisitions among practices (or acquisition of a practice by a system), practice closures, physician job changes, and new physicians entering practice in settings different than those from which retiring physicians are leaving."

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