More physicians move to practices owned by hospitals & private equity groups - American Medical Association | AMA

Physicians continue to move away from independent private practice and increasingly work in practices owned by hospitals or private equity groups, according to the latest analysis from the American Medical Association (AMA). The report, part of the AMA's Policy Research Perspective series, examines long-term shifts in practice arrangements and payment methodologies. Physicians surveyed cited inadequate payment rates, costly resources, and burdensome regulatory and administrative requirements as longstanding and important drivers of the change.

According to the analysis, 42.2 percent of physicians worked in private practices in 2024, a decline of 18 percentage points from 60.1 percent in 2012. Private practices now account for less than half of physicians in most specialties, ranging from 30.7 percent in cardiology to 46.9 percent in radiology. Exceptions included orthopedic surgery (54 percent), ophthalmology (70.4 percent), and other surgical subspecialties (51.2 percent).

Hospital-owned practices gained share over the same period. The proportion of physicians working in hospital-owned practices rose to more than one-third (34.5 percent) in 2024, up from 23.4 percent in 2012. The share directly employed by a hospital, or contracted directly with one, was 12 percent, double the 5.6 percent recorded in 2012. Physicians characterizing their practice as private equity-owned reached 6.5 percent in 2024, higher than the roughly 4.5 percent recorded in both 2020 and 2022.

Among independent physicians who sold their practices in the last 10 years to a hospital, private equity firm, or insurer, inadequate payment rates were the most cited reason, rated important or very important by 70.8 percent of respondents. Next were the need to improve access to costly resources (64.9 percent) and better manage payers' regulatory and administrative requirements (63.6 percent).

AMA President Bruce A. Scott, M.D., said the share of doctors in physician-owned practices is "unraveling under compounding pressures." He cited a 33 percent decline in Medicare physician payment over the past quarter century after adjusting for inflation in practice costs, warning that payment updates are necessary for physicians to continue practicing independently.