Most US Physicians Still Work in Small Practices

Megan Brooks

July 13, 2015

Most physicians in the United States continue to work in small practices despite the challenging healthcare working environment, according to an updated Policy Research Perspectives from the American Medical Association (AMA).

"These data show that the majority (60.7%) of physicians were in small practices of 10 or fewer physicians, and that practice size changed very little between 2012 and 2014 in the face of profound structural reforms to healthcare delivery," AMA president-elect Andrew W. Gurman, MD, says in a news release.

But the percentage is down markedly from 30 years ago, when more than three quarters of doctors worked in the small practice setting, the report notes. "It is clear that physician practice has undergone marked changes over the past 30 years," the report says.

AMA senior economist Carol K. Kane, PhD, assessed practice arrangements of physicians in 2014 and changes in work arrangements that occurred between 2012 and 2014 using data from the AMA's Physician Practice Benchmark Surveys. The surveys compose a nationally representative sample of postresidency physicians who provided at least 20 hours of patient care per week, were not employed by the federal government, and practiced in one of the 50 states or the District of Columbia.

Where possible, Dr Kane compared the current data with those from 30 years ago, which turned up some "dramatic" changes.

Owner or Employee?

According to the report, in 2014, 50.8% of physicians were owners of their practices, down slightly from 53.2% in 2012 but well below what it was in 1983, when 76.1% of physicians owned their practices.

Forty-three percent of physicians were employed by their practice in 2014, and 6.2% had a contract with their practice. Since the mid-1980s, the contractor percentage has been in the 4% to 7% range, with no discernable trend either upward or downward, the report says.

In 2012 and 2014, single specialty practice was the most common practice type, with 42% of physicians in single specialty practices in 2014, down slightly from 45.5% in 2012. "Second, and growing, was multi-specialty practice," with 25% of physicians in this practice type in 2014, up from 22.1% in 2012, the report notes.

More physicians worked directly for a hospital or in practices that had at least some hospital ownership in 2014 than in 2012 (32.8% vs 29%). The share of physicians directly employed by a hospital rose from 5.6% in 2012 to 7.2% in 2014; the share of physicians in practices with at least some hospital ownership increased from 23.4% to 25.6%.

Practice size changed very little between 2012 and 2014. In 2014, 22.3% of physicians were in practices of two to four doctors, up by slightly more than 2 percentage points from 2012. This was the biggest change, and the only one that was statistically significant across six size categories, the report notes.

In 2014, 20% of physicians were in practices of five to 10 physicians (about 2 percentage points lower than in 2012), 12.1% were in practices of 11 to 24 doctors, 6.3% in practices with 25 to 49 doctors, and 13.5% practiced with 50 or more physicians.

"Although recent changes in practice size have been minimal, there are marked differences from the mid-1980s," the report notes, with a smaller share of physicians now working in practices with 10 or fewer physicians than in 1983 (60.7% vs 79.6%).

The share of physicians in solo practice fell from 18.4% in 2012 to 17.1% in 2014 and is down from more than 40% in 1983.

The AMA is "committed to ensuring physicians in all practice sizes and types can thrive and offers innovative strategies and resources that address common practice challenges in the new health environment," Dr Gurman said in the release.

The updated Policy Research Perspectives is available on the AMA's website.

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