Hospital-owned physician practices continue to grow as doctors steadily move away from private practice, citing significant financial and regulatory challenges that make it difficult to stay independent.

In 2024, 42.2% of physicians worked in private practices, that is, a practice that was wholly-owned by physicians—that's 18 percentage points lower than in 2012, when 60% of physicians worked in private practice, according to the American Medical Association's Physician Practice Benchmark Survey.

In 2022, 46.7% of physicians worked in private practices.

The growth of the physician population notwithstanding, this means that around 80,000 fewer physicians were in private practice in 2024 than in 2012, the report found.

Forty-seven percent of physicians worked in practices that included 10 or fewer physicians in 2024, the first time this share has dipped below 50 percent.

More than one-third of physicians (34.5%) now work in a hospital-owned practice, that's up from one quarter (23.4%) in 2012, the AMA survey found. In 2024, 12% of physicians were employed directly by a hospital, or contracted directly with a hospital, that's double the share (5.6%) in 2012. 

In 2024, 6.5% of physicians characterized their practice as private equity-owned, higher than the shares in 2020 and 2022, which were both around 4.5%, according to the survey.

The survey did not separate out physician practices owned by insurers. But 4.6% of physicians indicated they worked at a practice that was owned by an organization other than hospitals or private equity, which includes insurance companies.

Doctors also tend to work in practices that are larger and more likely to be multi-specialty, the survey found.

Forty-seven percent of physicians worked in practices that included 10 or fewer physicians in 2024, the first time this share has dipped below 50 percent, according to the AMA. In 2012, 61.4% of physicians worked in practices of that size and, in the early 1980s, it was around 80%.

Thirty-seven percent of physicians worked in single-specialty practices in 2024, compared to 27.8% practicing medicine in multi-specialty practices. But the gap between the two practice types (9 percentage points) was much narrower in 2024 than in 2012 (23 percentage points), the AMA survey found.

Carol Kane, Ph.D., director of economic and health policy research at the AMA and author of the report, noted that these changes in practice size and type are consistent with one another and are partially driven by the movement away from private practice. Private practices are both smaller than practices owned by hospitals or other organizations and are more likely to be solo or single-specialty practices, she noted.

Since 2012, there has been a near-continuous decrease in the percentage of physicians who have an ownership stake in their practice, from 53.2% to 35.4% in 2024.  

The AMA has been conducting the benchmark survey on a biennial basis since 2012 and the 2024 survey was based on responses from approximately 2,100 physicians.

Doctors also often cited inadequate payment rates, costly resources and burdensome regulatory and administrative requirements as key factors in the decision to sell practices to hospitals, private equity firms or insurers. 

When asked to identify the motivations for a sale, the need to “better negotiate higher payment rates with payers” garnered the highest response (70.8%) from physicians.

Physicians also pointed to the need to "improve access to costly resources” (64.9%) and “better manage payers’ regulatory and administrative requirements” (63.6%). These were the top three reasons, regardless of whether the practice was sold before or after 2019, Kane noted in the report.

Physicians also cited the need to “ease participation in risk-based payment models” (55.1%). Being able to better compete for employees in the labor market was also cited as a key factor.

"These are longstanding issues that have contributed to the erosion of physicians in small, physician-owned practices and continue to do so. In addition, the reasons given by physicians align with research which shows that markets with larger physician practices and with a greater degree of physician–hospital consolidation have higher prices for physician services," Kane wrote.

Digging into physician practice trends

Private practice by specialty:

The extent to which physicians remain in private practice varies greatly across specialties, with the highest shares among physicians in surgical subspecialties. Ophthalmology, with 70.4% of physicians in private practice in 2024, was, by far, the specialty with the largest share. Second was orthopedic surgery (54%) followed by other surgical subspecialties with a combined share of 51.2%.

Timing of practice acquisitions:

Across all physicians in hospital-, insurer-, or private equity-owned practices, 15.1% were purchased in the past 5 years, after 2019. 15.3% in the five years prior to that (between 2015 and 2019), and 41.6% before 2015. Twenty-eight percent of physicians were not sure. 

Practice ownership by private equity firms is a relatively more recent phenomenon than ownership by hospitals, Kane noted in the report. Thirty-eight percent of physicians in private equity-owned practices said they had been acquired in the past five years. In contrast, 10% of physicians in hospital-owned practices were acquired in that time frame. 

Trends in practice size:

The data on practice size highlight the continued erosion of small practices. Between 2012 and 2024, the share of physicians in practices with 10 or fewer physicians fell from 61.4% to 47.4%, a 14 percentage point decrease. Further, the share of physicians in practices with 50 or more physicians increased from less than 5% in the early 1980s to 12.2% in 2012 and 18.3% in 2024.   

Private practices are markedly smaller, with almost half of private practice physicians in practices with five or fewer physicians compared only 16.1% and 12.9% of physicians in hospital-owned and private equity-owned practices, respectively.