Employed physicians outnumber independent physicians for the first time ever

May 8, 2019

More physicians are now employed by a hospital or a hospital-owned practice than own their own practice, according to a new employment study released this week by the American Medical Association (AMA).

For the first time in the United States, more physicians are now employed by a hospital or a hospital-owned practice than own their own practice, according to a new employment study released this week by the American Medical Association (AMA).

In 2018, the latest available data, 47.4 percent of physicians worked as employees, compared to 45.9 percent that were owners, while the remaining 6.7 percent of physicians work as independent contractors. That’s a 7 percent shift since 2012, according to the AMA.

The change in employment status for U.S. physicians is not surprising-it’s a culmination of a decades-long trend that has ebbed and flowed along with the market and policy landscape and has included hospitals buying up independent practices and large organizations merging to achieve economies of scale and better negotiating leverage with payers.

“Transformational change continues in the delivery of healthcare and physicians are responding by re-evaluating their practice arrangements,” said Barbara L. McAneny, MD, the AMA’s president, in a news release. “Physicians must assess many factors and carefully determine for themselves what settings they find professionally rewarding when considering independence or employment.”

The AMA report cautions that while the trend toward physician employment has continued for decades, it is not guaranteed to last forever. In fact, the rate of physicians switching from practice owners to employees has slowed in recent years. The majority of physicians who care for patients (54 percent) still worked in physician-owned practices in 2018 either as an owner, employee, or contractor. In fact, many physicians prefer independent arrangements if they can make them viable.

For primary care specialties, the ownership vs. employment trend broke down in this way:

• General internists: A slim plurality remain owners of their own practices-46.9 percent were owners, 46.8 percent were employees and 6.3 percent were independent contractors.
• Family physicians: The majority of family physicians are now employees-57.4 percent are employees, 37.5 percent remain owners and 5.1 percent are independent contractors

Younger physicians and female physicians are more likely to be employed, the AMA data shows. Nearly 70 percent of physicians under age 40 were employees in 2018, compared to 38.2 percent of physicians age 55 and over. Among female physicians, more were employees than practice owners-57.6 percent compared to 34.3 percent. The reverse is true for male physicians: more were practice owners than employees-52.1 percent compared to 41.9 percent).

And despite the ownership shifts, in 2018 most physicians (56.5 percent) still worked in small practices with 10 or fewer physicians. This share has fallen slowly but steadily since 2012, when the number was 61.4 percent.

“This change has been predominantly driven by the shift away from very small practices, especially solo practices, in favor of very large practices of 50 or more physicians,” the AMA report reads.

To read the study and learn more, visit the AMA website.