The most influential factor for physicians in deciding to sell off private practices to either hospitals or private equity companies in 2024 was the ability to better negotiate higher payment rates with payers, according to the American Medical Association’s Physician Practice Benchmark Survey.
The AMA surveyed 5,000 physicians who have completed residency, provide patient care for at least 20 hours per week, are not employed by the federal government and practice in one of the 50 states or D.C.
As of 2024, just 42.4% of physicians work in private practice, down from 60.1% in 2012, according to the survey.
Ophthalmology has the largest percentage of specialists who remain in private practice, at 70.4%, followed by orthopedic surgeons at 54%.
The number of hospital-employed physicians rose by 33% between 2013 and 2022 from around 157,000 to more than 205,000. In contrast, private practices grew by 17%, indicating hospitals are hiring at roughly double the rate, according to a new report published May 13 in the Journal of the Society of Laparoscopic and Robotic Surgeons.
The total number of employed physicians increased by 22% over the last decade from roughly 620,000 in 2013 to over 760,000 in 2022.
Here are the key reasons that private practices were sold in 2024, based on the percentage of physicians who listed the following reasons as “important” or “very important”:
1. Better negotiate higher payment rates with payers: 70.8%
2. Improve access to costly resources: 64.9%
3. Better manage payers’ regulation and administration requirements: 63.6%
4. Ease participation in risk-based payment models: 55.1%
5. Better compete for employees in the labor market: 48.9%
6. Increase availability of additional services that patients need: 48%
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