Employed Physicians Outnumber Self-Employed Docs, AMA Finds
47.4 percent of all patient care doctors were employed physicians in 2018, while the share of self-employed physicians fell to 45.9 percent, the AMA reports.
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By - The number of employed physicians has increased by six percentage points since 2012, bringing the share of employed physicians up to 47.4 percent of all patient care doctors in 2018, according to an updated study on physician practice arrangements by the American Medical Association (AMA).
In contrast, the industry saw a decrease in the number of self-employed physicians, the study finds. The number of self-employed physicians fell by seven percentage points from 2012 to 2018, resulting in 45.9 percent of all patient care doctors being self-employed by the end of the period.
The remaining seven percent of patient care doctors identified as independent contractors in 2018.
While the AMA says changes of this magnitude are not unprecedented, this is the first time in the US that employed physicians outnumbered self-employed physicians.
“Transformational change continues in the delivery of healthcare and physicians are responding by reevaluating their practice arrangements,” Barbara L. McAneny, MD, AMA president, states in a press release. “Physicians must assess many factors and carefully determine for themselves what settings they find professionally rewarding when considering independence or employment.”
New data from AMA’s Physician Practice Benchmark Surveys show that the fall of self-employed physicians from 2012 to 2018 is not a new trend. Rather, the data reveals a continuation of a trend that has been almost continuously occurring for the last 35 years.
Data from earlier AMA physician surveys shows the share of self-employed physicians declining between the early 1980s, during which the share stood at 75.8 percent, and the mid-1990s, which had a share of 57.7 percent. The decline in self-employed physicians then somewhat leveled off from 2007 to 2008.
Physicians are moving to specialty groups and hospitals rather than owning their own practice, the new report finds. Most physicians (42.8 percent) reported working for a single specialty group in 2018, while 25 percent belonged to a multi-specialty group and 8 percent worked directly for or contracted directly with a hospital.
The number of physicians working in single or multi-specialty groups has remained relatively stable since 2014, AMA reports. But the share of physicians employed by a hospital increased from 5.6 percent in 2012.
However, independent practice numbers took the greatest hit, the report shows. About 14.8 percent of physicians worked in an independent practice in 2018, down from 18.4 percent in 2012.
Physicians are generally moving to larger practices and hospitals, the report finds.
The majority of physicians (56.5 percent) still worked in a small practice of 10 or fewer physicians by 2018. However, that share dropped from 61.4 percent in 2012.
Throughout the period, physicians shifted toward very large practices with 50 or more physicians. The percentage of physicians in very large practices rose from 12.2 percent in 2012 to 14.7 percent in 2018, while the share of physicians in mid-sized practice (with 11 to 24 and 25 to 49 physicians) saw little change.
As with employment status, the industry has seen a continuous shift of physicians working for larger practices. The AMA observed even greater shifts in the late 1980s and early 1990s, and notably the share of physicians in solo practice fell by almost 10 percentage points from 38.6 percent to 29.3 percent between 1998 and 1994.
The desire to curb healthcare spending prompted the trend toward larger practices and employment models in the 1980s and 1990s, AMA explains. A similar push to cut spending, as well as implement value-based care and improve outcomes, is now creating a similar effect.
But the AMA warns that the trend may not last. Shifts in physician practice arrangements stalled after the early 1990s because healthcare spending did not significantly decrease. Should new care and payment models not deliver, provider consolidation may also slow, the AMA states.
Provider consolidation may already be hitting the brakes, according to recent research.
The healthcare industry saw the greatest number of merger and acquisitions (M&A) deals announced in 2017 compared to recent history, consulting firm Kaufman Hall reported. But the firm recently found that M&A activity started to dip in 2019.
Research suggests that the industry may be hitting a tipping point as more markets become consolidated and new payment models take time to realize savings.
