Private medical practices, once exalted as the mainstay of American medicine, may soon join typewriters and landlines as retro emblems, if results of the latest American Medical Association’s Physician Practice Benchmark Survey accurately forecast the future.
Consider this: For the first time since 2012, when the AMA began this annual survey, less than 50% of survey responders said they were in private, physician-owned practices.
“Although data collected by the AMA from 3,500 U.S. physicians through the 2020 Physician Practice Benchmark Survey show the continuation of shifts toward larger medical practices and away from physician-owned practices, the magnitude of change since 2018 suggests these trends have accelerated,” the AMA said in a prepared statement. In the latest survey, which was conducted in September and October 2020, 49.1% of responders said they worked in a physician-owned practice, down 5% from the survey responses in 2018. At the same time, the number of physicians practicing in large practices—more than 50 physicians—increased from 14.7% in 2018 to 17.2% in 2020, another “record” change.
“There are several contributing factors to the ongoing shifts in practice size and ownership that include mergers and acquisitions, practice closures, physician job changes, and the different practice settings chosen by younger physicians compared to those of retiring physicians,” said AMA President Susan R. Bailey, MD, in the statement. “To what extent the Covid-19 pandemic was a contributing factor in the larger than usual changes between 2018 and 2020 is not clear. 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.”
Other trends:
- 50.2% of physicians in direct patient care in 2020 were employed, up from 41.8% in 2012, and just 44% of physicians said they were self-employed. A minority of physicians—less than 7% of 3,500 surveyed—said they were independent contractors.
- Close to 40% of physicians work for a practice that is part of a hospital system or is owned by a hospital. In 2020, the AMA asked for the first time about private equity ownership of practices and found that 4% of physicians worked in practices owned by private equity firms.
- Although more physicians are working large practices, a majority still work in practices of no more than 10 physicians, and as physicians age they are more likely to work in small practices.
“New in the 2020 AMA survey, physicians in private practice were asked about their business structure,” the AMA wrote. “The type of business structure has tax and liability implications for the practice owners. Together, two business structures accounted for over half of physicians in private practice: limited liability companies (27.8%) and S corporations (24.7%). Fifteen percent of physicians in private practice indicated that their business was a C corporation. The shares of physicians in partnerships and in sole proprietorships were similar, each around 10%.”
Peggy Peck, Editor-in-Chief, BreakingMED™
Cat ID: 510
Topic ID: 505,510,510,556,730,192,150,463,590,60,925
