Physicians must consider loss of authority when corporate investors buy in, AMA says

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Physicians must remain in charge of clinical decisions when corporate investors buy into the finances of medical practices, according to the American Medical Association (AMA).

More corporate entities are investing in health care, and doctors may welcome that as a way to remain in independent practice. But physicians must consider those relationships carefully and investors must respect doctors’ authority in medical decision making, AMA said.

The association announced physicians and medical students voted for stronger guidance for physicians considering new partnerships or corporate relationships.

Marilyn J. Heine, MD
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“The AMA supports a physician’s right to choose their mode of practice and urges physicians to carefully consider the risks and benefits associated with corporate relationships,” said AMA Board Member Marilyn J. Heine, MD. “If a physician elects to enter into a corporate relationship, that choice should be made with important safeguards to ensure clinical autonomy and authority over patient care are retained by the physician.”

The guidance follows a new Policy Research Perspectives paper AMA published in late May. In “Physician Practice Characteristics in 2024: Private Practices Account for Less Than Half of Physicians in Most Specialties,” author Carol K. Kane, PhD, analyzed data from AMA’s Physician Practice Benchmark Survey, and found a continuing decline of smaller, independent, physician-owned medical practices.

The main problems: Physicians are struggling to get higher payment rates from payers, they need to access costly resources, and administrative burdens are not easy to manage.

AMA’s announcement about physician-corporate partnerships acknowledged that.

“Corporate investment can offer an alternative to selling a practice to a hospital or health system, and physician-owners can possibly benefit from being freed of business, financial, and operational administrative responsibilities, leaving more time for a focus on patient care,” the AMA announcement said. But corporate investors may insist on operational or administrative procedures that erode physician autonomy, quality of care and patient outcomes.

“Many physicians are rightfully concerned about the loss of professional control that could arise from partnering with a corporate entity,” Heine said. “At the same time, physicians may value corporate investment as an option to free private practices from the cumulative impact of burdensome regulations, rising financial strain, and relentless cuts in payment. The underlying challenges to physician practice viability and stability must be better addressed so independent physician practices can thrive without the need for corporate investment.”