1 in 2 Physicians Still Self-Employed as Hospitals Beckon

September 18, 2013

Hospital hiring may be hot and heavy, but 53.2% of physicians beyond residency training were still full or part owners of their practices in 2012, according to a new study released yesterday by the American Medical Association (AMA).

"To paraphrase Mark Twain, the reports of the death of private practice medicine have been greatly exaggerated," said AMA President Ardis Dee Hoven, MD, in a news release.

Another 41.8% of physicians in 2012 were employees, and 5% were independent contractors.

Although it is not ready for an autopsy, private practice medicine is nevertheless ailing, given a dramatic drop in self-employment during the last several decades. In 1983, the percentage of self-employed physicians stood at 75.8%, according to the AMA survey. This trend parallels the downhill slide of solo practice, which accounted for 40.5% of physicians in 1983 compared with 18.4% in 2012.

Furthermore, the entrepreneurial spirit in medicine is weakest in up-and-coming physicians. The AMA reports that 43.3% of physicians younger than 40 years were self-employed in 2012 compared with 51.4% for those aged 40 to 54 years and 60% for those aged 55 years and older. Likewise, solo practice was least prevalent for physicians younger than 40 years (10%) and most prevalent for those aged 55 years and older (25.3%).

Some medical fields were more independent than others. Almost 69% of anesthesiologists were practice owners compared with 37.3% of pediatricians. In general, primary care physicians were less likely to be the masters of their economic fate.

Table. Who Are the Physician Entrepreneurs?

Specialty Percentage of nonresident physicians who are practice owners Percentage of nonresident physicians who are employees or independent contractors
Surgical subspecialties 71.9 28.1
Anesthesiology 68.7 31.3
Radiology 63.6 36.5
Internal medicine subspecialties 61.5 38.5
Obstetrics/gynecology 55.8 44.2
Other 55.5 44.6
Internal medicine 46.0 53.9
Surgery 45.6 54.4
Psychiatry 41.2 58.9
Family practice 39.8 60.2
Emergency medicine 38.4 61.7
Pediatrics 37.3 62.7

Source: AMA 2012 Physician Practice Benchmark Survey

About 29% of Physicians Work for Hospitals or Their Practices

The AMA survey on physician practice arrangements sought to bring clarity to an unclear statistical picture of who is working for whom in medicine. It noted survey data from the American Hospital Association (AHA) showing that the number of physicians employed by hospitals increased from 160,000 in 2000 to 212,000 in 2010, for a 32% jump. However, the AHA did not categorize the type of employment relationship that physicians had. Furthermore, the figures included residents and a small number of dentists.

Although this and other studies suggest a tsunami for hospital employment, the AMA found that only 23% of nonresident physicians were employed by practices that were at least partially owned by a hospital or hospital system in 2012. Another 5.6% of nonresident physicians were employed directly by a hospital or hospital system. The combination of these 2 groups represented almost 29% of all nonresident physicians, which is up considerably from the 16.3% of physicians who had some kind of employment relationship with hospitals in 2007-2008, according to the AMA.

In contrast, 60% of physicians worked in practices, either as employees or owners, which were wholly owned by physicians in 2012.

Healthcare reformers must recognize the full spectrum of physician practice types, sizes, and ownership arrangements, the AMA report stated. "While some physicians will easily be able to adapt to and engage in accountable care organizations or other health delivery structures that emphasize greater integration and care coordination, for others, it will prove more of a challenge."


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