AMA Analysis Details Changes in Business Models for Physicians

July 14, 2023
Data reflects factors influencing changes that have taken place over the past decade

In a newly released analysis of physician practice arrangements, the American Medical Association (AMA) found that economic, administrative, and regulatory burdens are the main reasons physicians are less likely to work in private practice now versus 10 years ago. The AMA collected the data for the analysis between 2012-2022, through the Physician Practice Benchmark Survey.

The analysis is designed to review the “changes in the ownership and organization of physician practices, as well as the reasons that private practices are sold to hospitals or health systems.” Looking to results of the analysis, approximately 70 percent of physicians indicated that “the need to better negotiate favorable payment rates with payers” was an important reason in the sale of their practice to a hospital or health system. In addition, “the need to improve access to costly resources and the need to better manage payers’ regulatory and administrative requirements” was also indicated as an important reason as well. 

According to AMA President, Jesse M. Ehrenfeld, M.D., M.P.H, “The AMA analysis shows that the shift away from independent practices is emblematic of the fiscal uncertainty and economic stress many physicians face due to statutory payment cuts in Medicare, rising practice costs, and intrusive administrative burdens. Practice viability requires fiscal stability, and the AMA’s Recovery Plan for America’s Physicians is explicit in calling for reform to our Medicare payment system that has failed to keep up with the costs of running a medical practice.” 

The new analysis found three areas that were key in the shifting distribution of physician practice arrangements: practice ownership, practice size, and employment status. While practice ownership is the area that has experienced the most dramatic shift in the last decade, practice size saw an increase in the share of physicians in large practices. Employment status evidenced an overall drop in self-employed physicians and has been an integral part of the changed practice ownership landscape during the last 10 years. 

The new analysis is the latest addition to the AMA's Policy Research Perspective series that examines long-term changes in practice arrangements and payment methodologies. The new AMA study, as well as previous studies, are available to download from the AMA website.        

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