Independent medicine is alive and well — if you know where to look

Private practice shuts its doors after 30 years. Health care options shrink in rural communities across the country. Dr. Smith retires to spend more time with family.

These are just a few examples of headlines that run every day in news outlets across the country.

Yes, it is true that the number of doctors who own their own practices is shrinking. Recent statistics from the American Medical Association (AMA) indicate that, between 2012 and 2022 the share of physicians who work in private practices dropped by 13 percentage points, from 60.1 percent to 46.7 percent. According to a recent survey from the Physicians Advocacy Institute and Avalere, the percentage of physicians employed by corporate entities grew more than ten percent between 2022 and 2023, compared to a seven percent increase in hospital-owned practices.

This should not be surprising. Owning a small business is not for the faint of heart, especially during a global pandemic. Federal reimbursement is a big part of a doctor’s livelihood, and providers often have to jump through a lot of administrative hoops to get paid. Despite the commanding presence of many doctors, they are far more than their profession. They are people who, just like us all, want to spend time with loved ones, desire a predictable pay check, and want to have the flexibility needed to run a household in modern times.

The decline in physician practice ownership only tells part of the story. It does not mean that there are no more independent practices – or that private practice is collapsing, as will be discussed this week by the House Ways and Means Committee.

No, independent medicine is not dead. It just does not look like it used to. So, what does it look like today?

Independent practice is no longer synonymous with hanging out your own shingle or going the tough road of practice ownership. While some doctors still choose that route, many other independent doctors choose other arrangements that preserve their clinical autonomy and accountability for the benefit of their patients. These unique arrangements look different depending on the practice. Some independent practices and providers might enter into arrangements with a provider or other entity who can offer some type of funding or contractual arrangement. Some practices might choose to partner with a managed service organization (MSO) who can help them with clinical and administrative requirements.

How are independent practices thriving in today’s landscape?

Many independent practices are doing business differently and turning to value-based care models to generate greater, more predictable revenue streams. This transition is paying off, as independent physicians consistently outperform their hospital counterparts in shared savings models. In 2022, for example, physician-led accountable care organizations (ACOs) in the Medicare Shared Savings Program achieved nearly 50 percent greater per-beneficiary savings compared to hospital-led ACOs.

Does the provider landscape look different today than it did ten or even five years ago? The answer is unequivocally yes.

But does this mean that independent practice has fallen by the wayside? The answer is no.

We owe it to our doctors to think differently about independent medicine – what it looks like, what can help sustain it and where we go from here. Independent practices today may look different, and can take more than one shape. We must shift our perspective accordingly, and focus on supporting practices that are led by physicians who have clinical autonomy and accountability to their patients. This includes ensuring robust Medicare fee-for-service (FFS) reimbursement as a platform for value-based care and designing delivery system reform with independent physicians in mind.

Despite a changing landscape, independent physicians remain deeply committed to their practices, and report higher rates of satisfaction compared to their employed counterparts.

The new generation of independent physicians is alive and well. With the right support, it will continue to thrive.

Kristen McGovern, JD, is the Executive Director of the Partnership to Empower Physician-Led Care, a coalition advocating for value-based care as a path to sustainability for independent practice.