Policy Research Perspectives:
For the First Time, Fewer Physicians are Owners Than Employees

By Carol K. Kane, PhD

Using data from the American Medical Association’s (AMA’s) Physician Practice Benchmark Surveys, this Policy Research Perspective (PRP) describes the practice arrangements of physicians between 2012 and 2018. The Benchmark Surveys include physicians who provide at least 20 hours of patient care per week, are not employed by the federal government, and practice in one of the 50 states or the District of Columbia.

As discussed in a previous report on this topic (Kane, 2017), 2016 was the first year in which less than half of practicing physicians (47.1 percent) had an ownership stake in their practice. With this report a new milestone has been reached—2018 marked the first year in which there were fewer physician owners (45.9 percent) than employees (47.4 percent). While these two events are notable, they reflect, as this PRP will discuss, the continuation of a longer-term trend.

The Benchmark Surveys also indicate that the distribution of physicians continues to slowly shift from practices that are very small in size to those that are very large. Between 2012 and 2018 the percentage of physicians in practices with 10 or fewer physicians dropped from 61.4 percent to 56.5 percent with much of that change driven by a shift away from solo practice.

In addition to changes in practice size, practice ownership is shifting away from physician-owned practice (“private practice”) and toward working directly for a hospital or for a hospital-owned practice. Although this change is ongoing, it has been moving more slowly since 2014 than between 2012 and 2014. While the percentage of physicians working in physician-owned practices was lower in 2018 than in 2012 (54.0 percent compared to 60.1 percent) more than half of that decrease occurred in the first two years of that period.

New this year, this report includes a more in-depth look at private practice, including the size of those practices and a discussion of how that type of ownership structure varies across physician specialty.