As healthcare consolidation accelerates and pay shrinks, fewer physicians are choosing private practice. Yet for some, the autonomy and entrepreneurial opportunity are worth the risk.
As healthcare consolidation accelerates and physician reimbursement continues to shrink, fewer physicians are choosing private practice. Yet for some, the autonomy and entrepreneurial opportunity are worth the risk.
Shobhit Minhas, MD, an orthopedic surgeon at Fox Valley Orthopedics, an independent group in Algonquin, Ill., spoke with Becker’s about the realities of private practice in 2025: the rewards, the risks, and why it’s not a path for everyone.
“The number one reason I think people go into private practice is autonomy,” Dr. Minhas said. “Because in private practice, you kind of set your own rules. You set your own hours, to an extent, and you’re kind of in control, in the sense that you eat what you kill. So whatever comes into your door, you do it, you bill for it, and that’s what it is.”
In 2024, just 42.2% of physicians were working in private practice, a significant decline from 60.1% in 2012, according to a recent report from the American Medical Association. Still, private practice remains attractive to physicians seeking to avoid what some see as rigid health system structures.
“Especially as healthcare systems and hospitals are starting to take over a lot, they enforce a lot of rules. Like, ‘These are the types of patients you have to see,’ or, ‘You have to do clinic on X, Y, and Z days,’” he said. “A lot of younger physicians may not want that.”
Data supports this perception of diminishing physician autonomy. According to a survey from NORC at the University of Chicago, 61% of employed physicians said they have moderate or no autonomy to make referrals outside their practice or ownership system. Additionally, 47% said they adjust treatment options to reduce costs based on practice policies or financial incentives.
Further, a Bain & Co. survey found that 81% of physicians in physician-led organizations were satisfied with their involvement in strategic decision-makingcompared to just 50% of those in health system-led practices.
For physicians who can build a sustainable practice, long-term financial potential is another draw.
“From a financial standpoint, is it as good as it was in the ’90s and 2000s? No, because reimbursement is way lower,” Dr. Minhas said. “However, I think there is a chance to make more money than in an employed model long term — if you survive. If you get a robust practice, you’re also getting ancillary revenue as well. That adds up.”
Still, the early years in private practice can be financially challenging.
“You usually start off with a pretty low salary because you have to prove your worth,” Dr. Minhas said. “Most independent private practices, unlike hospital systems, aren’t able to offer a hefty salary the first couple of years. It’s the complete opposite. You might have some incentives there, but the goal is: Can this person survive?”
A January 2024 study in JAMA Health Forum found that negotiated prices for office visits with hospital-affiliated physicians were, on average, 10.7% higher than those paid to independent physicians. Meanwhile, a separate study by Avalere and the American Independent Medical Practice Association found that in 2022, Medicare expenditures for private equity-affiliated private practices were 9.8% lower than those for hospital-affiliated practices.
Attrition is high, he continued. Many physicians simply don’t generate enough revenue early on to justify their pay, an issue made worse by declining margins.
“You’re playing with margins, and the game is against you,” Dr. Minhas said. “Margins keep getting smaller and smaller. Every year, it becomes a little more of a challenge to balance the books.”
Despite these headwinds, for a certain kind of physician, private practice remains worth the gamble.
“It takes a certain type of person that’s willing to bet on themselves,” he said. “But those are the same types of people with an entrepreneurial spirit. If you’re an entrepreneur, you may go to zero, but you have belief in yourself.”
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