Physicians' departure from private practice has accelerated since 2018, AMA says

Physicians are less often working in physician-owned practices and more often seeking positions at larger medical practices, a new American Medical Association (AMA) survey suggests.

The professional organization said 49.1% of its 3,500 national survey respondents were working in private practice as of fall 2020, a drop from the 54% reported in 2018.

This difference is the largest shift the AMA has observed between polls since kicking off its biennial surveys in 2012. It's also the first time the proportion has ever dropped below 50%.

Complementing this was a similarly unprecedented change in the percentage of physicians working in practices with 50 or more physicians, which AMA said jumped from 14.7% in 2018 to 17.2% in 2020.

Based on accompanying age data, that finding outlines a pattern of older physicians retiring from small practices more quickly than they are being replaced, AMA said.

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The steady transition from physicians as practice owners to employees has also persisted over the last couple of years, AMA said.

In 2020, 50.2% of respondents said they were employees (up from 47.4% in 2018), 44% said they had an ownership stake in their practice (down from 45.9% in 2018) and 5.8% said they were independent contractors (down from 6.7% in 2018).

As in previous years, women and younger physicians were more likely to be employees than their male and older counterparts. Employment by specialty ranged from below 40% for surgical subspecialists and radiologists to about 58% for pediatricians and family medicine physicians. Ownership differences swung from less than 30% of emergency medicine physicians to over 60% of surgical subspecialists.

Taken together, AMA said that the survey results are an acceleration of the trends it has been observing since 2012.

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AMA President Susan R. Bailey, M.D., said the speed hike could be fueled by a number of different developments such as the industry’s increasing merger and acquisition activity, physician job changes and the new crop of young physicians entering the workforce.

It’s also possible that COVID-19 played a role in the larger-than-usual differences. While the organization warned that its data “may not reflect the full impact the pandemic will have on physician practice arrangements” due to the collection of survey results only six months into the pandemic, it also highlighted the financial strain the emergency has brought to many practices.

“To what extent the COVID-19 pandemic was a contributing factor in the larger than usual changes between 2018 and 2020 is not clear,” Bailey said in a statement. “Physician practices were hit hard by the economic impact of the early pandemic as patient volume and revenues shrank while medical supply expenses spiked. The impact of these economic forces on physician practice arrangements is ongoing and may not be fully realized for some time.”

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Other industry reports have also outlined how the pandemic has impacted physicians’ mental well-being and compensation.

Survey data from earlier this year suggested a substantial portion of physicians are considering a new employer or leaving medicine entirely.

In January, Kaufman Hall highlighted declines in physician compensation and a major drop-off in new patient visits that are key to growing a young practice. However, data from Medscape’s annual Physician Compensation Report published a few months later hinted at a rebound in full-time salaries—although some specialties certainly fared better than others in that regard.