For first time, employed physicians outnumber self-employed doctors, AMA study finds

Last year marked a milestone for physician practices. 

There are now fewer physician owners than employees, according to a survey by the American Medical Association. It's the continuation of a long-term trend that has slowly shifted the distribution of physicians away from ownership of private practices.

For the first time, there are fewer physician owners (45.9%) than employees (47.4%), according to the AMA media release. The data were collected in a national survey of 3,500 U.S. physicians and reported in a Physician Practice Benchmark Survey (PDF).

The percentage of employed physicians in 2018 increased by 6 percentage points since 2012 while the figure for self-employed physicians dropped by 7 percentage points in the same time period.

Changes of this magnitude are not unprecedented, according to the AMA. Older surveys show the share of self-employed physicians fell 14 percentage points during a six-year span between 1988 and 1994.

RELATED: Tipping point: AMA study finds physician practice owners no longer the majority

Given the rate of change in the early 1990s, it appeared a point was imminent when employed physicians would outnumber self-employed physicians, but the shift took much longer than anticipated, according to AMA officials.

"Given that only now has the point been reached where the number of employed physicians exceeds the number of owner physicians, caution should be taken in assuming current trends will continue indefinitely," the AMA researchers wrote in the report.

"Transformational change continues in the delivery of health care and physicians are responding by reevaluating their practice arrangements,” AMA President Barbara L. McAneny, M.D., said in a statement. “Physicians must assess many factors and carefully determine for themselves what settings they find professionally rewarding when considering independence or employment."

AMA conducts the survey every even year, starting in 2012. The year 2016 marked a significant tipping point as the first year in which physician practice ownership was no longer the majority arrangement. According to the 2016 data, physicians were evenly distributed between owners and employees—47.1% of doctors own their own practice, with the same percentage employed and 5.9% independent contractors.

In most cases, doctors are working for other doctors, as 54% of doctors worked in physician-owned practices in 2018 either as an owner, employee or contractor. Although this share fell from 60% in 2012, the trend away from physician-owned practice appears to be slowing, as more than half of the shift occurred between 2012 and 2014.

Concurrently, there was an increase in the share of physicians working directly for a hospital or in a practice at least partly owned by a hospital. Physicians working directly for a hospital represent 8% of all patient care physicians, an increase from 5.6% in 2012.

RELATED: Report: 8,000 medical practices acquired by hospitals in 18 months

Physicians in hospital-owned practices were 26.7% of all patient care physicians, an increase from 23.4% in 2012. In the aggregate, 34.7% of physicians worked either directly for a hospital or in a practice at least partly owned by a hospital in 2018, up from 29% in 2012.

The trend was fueled by the preference of younger physicians toward employed positions. Nearly 70% of physicians under age 40 were employees in 2018.

Whether physicians are owners, employees or independent contractors varied widely across medical specialties in 2018. For instance, surgical subspecialties had the highest share of owners (64.5%) while emergency medicine had the lowest share of owners (26.2%) and the highest share of independent contractors (27.3%). Family practice was the specialty with the highest share of employed physicians (57.4%).

While the distribution of physicians has been shifting toward large practices and practices that are hospital-owned, 40% of physicians still worked in practices that were both small (10 or fewer physicians) and physician-owned in 2018, according to the report. More than half of doctors (56%) still work in practices with 10 or fewer physicians.