according to a new report.
These patterns likely reflect broader trends toward consolidation in health care, with both insurance companies and hospitals also having grown in size in recent years.
The latest biennial analysis of doctors’ practices by the American Medical Association showed an acceleration of a trend away from private practice, defined as a practice wholly owned by physicians. The 2020 results found less than half – 49.1 % – of doctors involved in patient care worked in a private practice, the AMA said in a report released in May 2021.
This marked the first time private practice was not the dominant approach since the AMA analysis began in 2012. What’s more, the trend appears to be gaining steam, with a drop of almost 5 percentage points from 54.0% in private practice in 2018. The percent of doctors in private practice declined at a slower rate in previous AMA surveys, slipping to 55.8% in 2016 from 56.8% in 2018 and 60.1% in 2012.
Employment and ownership structures have become so varied that no single approach or size of organization “can or should be considered the typical physician practice,” the report noted.
The AMA, for example, added to its 2020 benchmark survey an option to identify private equity organizations as employers. The survey found 4% of doctors involved in patient care worked in practices owned by these kinds of firms. Other options include practices wholly or jointly owned by hospital and health systems and insurers, as well as direct employment and contracting.
There are signs that the shift away from smaller private practices will continue, with younger doctors appearing more likely to seek employment.
The survey found 42% of doctors ages 55 and older were employed by someone else, compared with 51.2% of doctors ages 40-54 and 70% of physicians under the age of 40.
The AMA surveyed 3,500 U.S. doctors through the 2020 Physician Practice Benchmark Survey. The survey was conducted from September to October 2020, roughly 6 months into the COVID-19 pandemic, and therefore may not reflect its full impact.
“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,” AMA President Susan R. Bailey, MD, said in a statement.
In a survey released in 2020 by McKinsey & Company, 53% of independent doctors reported that they were worried about their practices surviving the stresses of the pandemic, this news organization reported.
Challenging environment
It’s not just money leading to the shift away from private practice, according to a 2020 report from the American Hospital Association, titled “Evolving Physician-Practice Ownership Models.”
Many recent graduates of medical schools have significant debt and are more likely to opt for employment, which offers more financial stability and work-life balance, the report said.
Doctors also need to keep up with expectations of their patients that have been shaped by advances in other sectors, like banking, the AHA noted. People are used to working on their own schedules, and want to make appointments through apps, get test results rapidly and on their mobile devices, and communicate with their providers virtually.
“It is challenging to meet these expectations and make the necessary technology investments as a solo or small group practice,” the AHA report said.
Hospitals face competition for doctors from insurers, which have been looking in some cases to directly employ more physicians, the AHA also noted. The report cites insurance giant UnitedHealth Group’s Optum unit as the most visible example of this trend.
On a January call about corporate earnings, David Wichmann, then chief executive of UnitedHealth, spoke about the firm’s “aim to reinvent health care delivery,” including efforts to have its own primary and multispecialty care practices.
“OptumCare entered 2021 with over 50,000 physicians and 1,400 clinics,” Mr. Wichmann said. “Over the course of this year, we expect to grow our employed and affiliated physicians by at least 10,000. This work of building local physician-led systems of care continues to be central to our mission. “
UnitedHealth’s new CEO is Andrew Witty, who had led the Optum unit.