A greater percentage of physicians than ever before work in larger, multispecialty practices owned by hospitals and private equity firms, reflecting a continued, dramatic shift away from the small, private-practice model that at one point defined U.S. physicians’ work environments, a recently released AMA analysis has found.
The AMA Policy Research Perspective—“Physician Practice Characteristics in 2024: Private Practices Account for Less Than Half of Physicians in Most Specialties”—shows that 42.2% of physicians were in private practice in 2024, a precipitous drop from 2012, when 60.1% delivered care in that setting.
“The share of doctors working in practices wholly owned by physicians is unraveling under compounding pressures,” said Bruce A. Scott, MD, now the AMA’s immediate past president. “The cumulative impact of burdensome regulations, rising financial strain and relentless cuts in payment poses a dire threat to the sustainability of private practices. After adjusting for inflation in practice costs, Medicare physician payment has fallen 33% over the past quarter-century, which has severely destabilized private practices and jeopardized patients’ access to care. Payment updates are necessary for physicians to continue to practice independently.”
The analysis reviewed data collected in the Physician Practice Benchmark Survey, which asked questions of 5,000 U.S.-based physicians who have finished their residencies, care for patients at least 20 hours a week and do not work for the federal government. The physicians were surveyed about their practice type, its ownership structure, the number of physicians within the practice and whether the physicians are owners, employees or independent contractors.
“Many of the trends speak to the different environments in which physicians deliver care to their patients today compared to 12 years ago,” says the report, written by Carol K. Kane, PhD, director of economic and health policy research at the AMA.
Private practice prevails in these specialties
In 2012, the first year the survey was conducted, 23.4% of physicians said they worked for hospital-owned practices and 5.6% were employed by or contracted with a hospital. Twelve years later, 34.5% worked for hospital-owned practices and 12.2% were directly employed by or contract with hospitals. In two years, from 2022 to 2024, the share of physicians who said they worked at a practice owned by a private equity firm rose from 4.5% to 6.5%.
But there is variation among physician specialties in the prevalence of private practice. Of the specialties for which there were at least 100 responses in the survey, the five discrete specialties listing the highest shares of physicians in private practice were:
- Ophthalmology—70.4%.
- Orthopaedic surgery—54%.
- Radiology—46.9%.
- Anesthesiology—46.4%.
- Obstetrics and gynecology—46.3%.
Meanwhile, 51.2% of physicians practicing in other surgical specialties were in private practice. Private practice ownership rates were in the high 30% to low 40% range for the primary care specialties of pediatrics, internal medicine and family medicine.
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What’s driving the shift
Physicians overwhelmingly attributed the reasons for the shift to payment and financial issues, complex bureaucracy and regulatory demands, with 70.8% saying that the need to “better negotiate higher payment rates with payers” was either “very important” or “important” to the motivations behind the sale of their practice. Adjusted for inflation in practice costs, Medicare physician payment declined 33% from 2001 to 2025.
The other top three reasons most commonly cited as reasons for practice sales were the needs to “improve access to costly resources” (64.9%) and to “better manage payers’ regulatory and administrative requirements” (63.6%).
It takes astute clinical judgment as well as a commitment to collaboration and solving challenging problems to succeed in independent settings that are often fluid, and the AMA offers the resources and support physicians need to both start and sustain success in private practice.
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More doctors in bigger practices
The shift away from private practice also is connected to the trend of an increasing share of physicians working in in practices that include multiple specialties and more physicians.
In 2012, 61.4% of physicians worked in practices that had 10 or fewer physicians, a figure that fell to 47.4% in 2024. In the 1980s, the report says, about 80% of physicians worked in practices of 10 or fewer doctors and less than 5% were in practices of 50 or more. By 2012, the number of physicians in practices of 50 or more had climbed to 12.2%. By 2024, that share was 18.3%—nearly one in five doctors.
In addition, 37.2% of physicians in 2024 said they were in a single-specialty practice, down from 45.4% in 2012. The report says that 27.8% of physicians worked in multispecialty practices, which tend to be larger, in 2024, up around six percentage points since 2012.
Understanding the root cause
At the 2025 AMA Annual Meeting, held in Chicago this month, the House of Delegates directed the AMA to study and report back on “the root cause of the decline in private practice.” The study will include consideration of at least the following factors:
- The declining inflation-adjusted Medicare rates.
- Stark laws, which allow hospitals—but not private practice physicians—to self-refer.
- The development of insurance plans that have no out-of-network benefits.
- The permitted consolidation of insurers and hospitals.
- Hospital-insurer agreements with minimal in-network fee requirement and other conditions, such as the requirement for high hospital technical fees.
- More government influence by insurers and hospitals and decreased less influence from doctors.
- Inadequate formal education on the business of medicine.
- Educational debt of early career physicians.
- Evolving lifestyle preference of early career physicians.
- Overhead expenditures such as EHRs, personnel and administrative costs.
- Provider-based facility fees charged by hospital employers, but not by physician private practices.
Catch up with other highlights from the 2025 AMA Annual Meeting, and find out more by exploring the AMA Private Practice Physicians Section, which seeks to preserve the freedom, independence and integrity of private practice.
