Private practice remains strong despite an increase in hospital employment

Although more physicians today are employed by hospitals than in the past, the overwhelming majority of doctors still work in private practices, according to 2012 data from the Physician Practice Benchmark Study (PPBS) conducted by the American Medical Association (AMA).¹

The survey shows that 53.2% of physicians were self-employed in 2012, and 60% were operating in practices wholly owned by physicians. Only 23% of physicians worked in practices that were partially or fully owned by a hospital, and only 5.6% were directly employed by a hospital.¹

The AMA estimates that 18.4% of physicians worked in solo practices in 2012, a decline of about 6% from the previous AMA survey in 2207/2008.¹ In 1983, 40.5% of physicians were in solo practice.¹

“To paraphrase Mark Twain, the reports of the death of private practice medicine have been greatly exaggerated,” said AMA President Ardis Dee Hoven, MD, in presenting the figures.¹

And AMA investigators Carol C. Kane, PhD, and David W. Emmons, PhD, who authored the report, noted: “After a 5-year gap in physician-level data, the 2012 PPBS offers an update on the status of physician practice arrangements, and allows for a nationally representative response to the numerous articles of the past several years that have highlighted a surge in the employment of physicians by hospitals and the ‘death’ of private practice.”¹

Details of the survey
Like earlier AMA surveys, the PPBS involved a nationally representative random sample of physicians who had completed residency, practiced at least 20 hours per week, and were not employed by the federal government.

Unlike earlier AMA surveys, which targeted AMA members, the 2012 PPBS utilized the Epocrates Honors market research panel rather than the AMA Masterfile. The reason for this switch: declining participation rates for surveys utilizing the Masterfile.

Another distinction: Earlier surveys failed to ask specifically whether the respondent’s practice was owned by its physician members or by a larger entity, such as a hospital. They also overlooked the organizational structure of practices. The 2012 survey addressed both issues.

The PPBS went to 14,750 physicians. Of these, 3,466 physicians responded, a response rate of 28%.¹

FINDINGS ON THE STRUCTURE OF PRACTICE

Ownership status
In 2012, 53.2% of physicians fully or partly owned their practice (a decline of 8.0% since 2007/2008), 41.8% were employed, and 5.0% were independent contractors.¹

Younger physicians were less likely to own their practice than older physicians were. Among physicians under age 40, the ownership rate was 43.3%, compared with 60.0% among doctors aged 55 years or older.¹

Women, too, were less likely to own their practice (38.7% vs 59.6% for men).¹

Type of practice
The most common type of practice setting was the single-specialty practice, reported by 45.5% of physicians. Women were less likely to report single-specialty practice than men (39.7% vs 48.0%).¹

Among ObGyns, single-specialty practice was reported by 52.7% of respondents.¹

Multispecialty practice was reported by 22.1% of respondents. Among ObGyns, that figure was 17.9%.¹

Solo practice was reported by 18.4% of respondents but varied significantly by age. Among physicians under age 40, only 10% reported solo practice, compared with 25.3% of physicians aged 55 or older. Among women, solo practice was reported by 21.0%, compared with 17.3% among men. Among all ObGyns (men and women), 20.6% reported solo practice.¹

Only 5.6% of physicians reported direct hospital employment. Among ObGyns, the figure was 2.3%.¹

Size of the practice
Sixty percent of respondents (in all practice settings) reported working in a practice with fewer than 10 physicians. Sixteen percent reported working in a practice with 10 to 24 physicians, 7.1% in practices with 25 to 49 physicians, and 12.2% in practices with more than 50 physicians. Hospital employees were not asked about the number of physicians in their practice setting.

Among physicians in single-specialty practices, 39.0% reported that their practice included no more than four physicians, compared with 5.3% who reported a practice of at least 50 physicians.¹

Among physicians in multispecialty practice, only 9.9% reported having no more than four physicians, compared with 35.5% reporting at least 50 physicians.¹

Hospital ownership
Twenty-three percent of all respondents reported working in a practice that was at least partially owned by a hospital. Of these physicians, 14.7% worked in practices fully owned by a hospital.

Physicians who worked in a single-specialty practice were more likely to report physician ownership of that practice (71.8%) than were doctors in multi-specialty practice (36.9%). And physicians in small practices (single- or multispecialty) were more likely to report physician ownership than physicians in large practices: 72% of physicians in groups of two to four reported physician ownership, compared with 45.6% of physicians in groups of 50 or more. Physicians in large practices (≥50 members) also were more likely to report ownership by a not-for-profit foundation.¹

After exploring the issue of hospital ownership from several different angles, Kane and Emmons found that the association between increasing practice size and hospital ownership did not persist. Rather, they found that the “wider scope of practice in multispecialty groups, not practice size, drives hospital ownership.” They theorized that hospitals are more likely to buy primary care practices to gain a strong referral base, and this theory was borne out by the data, which showed that primary care physicians are more likely to report hospital ownership.¹

RELATED ARTICLE: Is private ObGyn practice on its way out? Lucia DiVenere, MA (October 2011)

Two final comments
Kane and Emmons point out that their analysis doesn’t “capture relationships that are short of full employment” and, therefore, may underestimate “the degree of integration between physicians and hospitals.”1

Although the decline in solo practice may have been accelerated by reform measures in recent years, the shift was “already well underway in the early 1990s,” Kane and Emmons observed.¹

Although more physicians today are employed by hospitals than in the past, the overwhelming majority of doctors still work in private practices, according to 2012 data from the Physician Practice Benchmark Study (PPBS) conducted by the American Medical Association (AMA).¹

The survey shows that 53.2% of physicians were self-employed in 2012, and 60% were operating in practices wholly owned by physicians. Only 23% of physicians worked in practices that were partially or fully owned by a hospital, and only 5.6% were directly employed by a hospital.¹

The AMA estimates that 18.4% of physicians worked in solo practices in 2012, a decline of about 6% from the previous AMA survey in 2207/2008.¹ In 1983, 40.5% of physicians were in solo practice.¹

“To paraphrase Mark Twain, the reports of the death of private practice medicine have been greatly exaggerated,” said AMA President Ardis Dee Hoven, MD, in presenting the figures.¹

And AMA investigators Carol C. Kane, PhD, and David W. Emmons, PhD, who authored the report, noted: “After a 5-year gap in physician-level data, the 2012 PPBS offers an update on the status of physician practice arrangements, and allows for a nationally representative response to the numerous articles of the past several years that have highlighted a surge in the employment of physicians by hospitals and the ‘death’ of private practice.”¹

Details of the survey
Like earlier AMA surveys, the PPBS involved a nationally representative random sample of physicians who had completed residency, practiced at least 20 hours per week, and were not employed by the federal government.

Unlike earlier AMA surveys, which targeted AMA members, the 2012 PPBS utilized the Epocrates Honors market research panel rather than the AMA Masterfile. The reason for this switch: declining participation rates for surveys utilizing the Masterfile.

Another distinction: Earlier surveys failed to ask specifically whether the respondent’s practice was owned by its physician members or by a larger entity, such as a hospital. They also overlooked the organizational structure of practices. The 2012 survey addressed both issues.

The PPBS went to 14,750 physicians. Of these, 3,466 physicians responded, a response rate of 28%.¹

FINDINGS ON THE STRUCTURE OF PRACTICE

Ownership status
In 2012, 53.2% of physicians fully or partly owned their practice (a decline of 8.0% since 2007/2008), 41.8% were employed, and 5.0% were independent contractors.¹

Younger physicians were less likely to own their practice than older physicians were. Among physicians under age 40, the ownership rate was 43.3%, compared with 60.0% among doctors aged 55 years or older.¹

Women, too, were less likely to own their practice (38.7% vs 59.6% for men).¹

Type of practice
The most common type of practice setting was the single-specialty practice, reported by 45.5% of physicians. Women were less likely to report single-specialty practice than men (39.7% vs 48.0%).¹

Among ObGyns, single-specialty practice was reported by 52.7% of respondents.¹

Multispecialty practice was reported by 22.1% of respondents. Among ObGyns, that figure was 17.9%.¹

Solo practice was reported by 18.4% of respondents but varied significantly by age. Among physicians under age 40, only 10% reported solo practice, compared with 25.3% of physicians aged 55 or older. Among women, solo practice was reported by 21.0%, compared with 17.3% among men. Among all ObGyns (men and women), 20.6% reported solo practice.¹

Only 5.6% of physicians reported direct hospital employment. Among ObGyns, the figure was 2.3%.¹

Size of the practice
Sixty percent of respondents (in all practice settings) reported working in a practice with fewer than 10 physicians. Sixteen percent reported working in a practice with 10 to 24 physicians, 7.1% in practices with 25 to 49 physicians, and 12.2% in practices with more than 50 physicians. Hospital employees were not asked about the number of physicians in their practice setting.

Among physicians in single-specialty practices, 39.0% reported that their practice included no more than four physicians, compared with 5.3% who reported a practice of at least 50 physicians.¹

Among physicians in multispecialty practice, only 9.9% reported having no more than four physicians, compared with 35.5% reporting at least 50 physicians.¹

Hospital ownership
Twenty-three percent of all respondents reported working in a practice that was at least partially owned by a hospital. Of these physicians, 14.7% worked in practices fully owned by a hospital.

Physicians who worked in a single-specialty practice were more likely to report physician ownership of that practice (71.8%) than were doctors in multi-specialty practice (36.9%). And physicians in small practices (single- or multispecialty) were more likely to report physician ownership than physicians in large practices: 72% of physicians in groups of two to four reported physician ownership, compared with 45.6% of physicians in groups of 50 or more. Physicians in large practices (≥50 members) also were more likely to report ownership by a not-for-profit foundation.¹

After exploring the issue of hospital ownership from several different angles, Kane and Emmons found that the association between increasing practice size and hospital ownership did not persist. Rather, they found that the “wider scope of practice in multispecialty groups, not practice size, drives hospital ownership.” They theorized that hospitals are more likely to buy primary care practices to gain a strong referral base, and this theory was borne out by the data, which showed that primary care physicians are more likely to report hospital ownership.¹

RELATED ARTICLE: Is private ObGyn practice on its way out? Lucia DiVenere, MA (October 2011)

Two final comments
Kane and Emmons point out that their analysis doesn’t “capture relationships that are short of full employment” and, therefore, may underestimate “the degree of integration between physicians and hospitals.”1

Although the decline in solo practice may have been accelerated by reform measures in recent years, the shift was “already well underway in the early 1990s,” Kane and Emmons observed.¹

Although more physicians today are employed by hospitals than in the past, the overwhelming majority of doctors still work in private practices, according to 2012 data from the Physician Practice Benchmark Study (PPBS) conducted by the American Medical Association (AMA).¹

The survey shows that 53.2% of physicians were self-employed in 2012, and 60% were operating in practices wholly owned by physicians. Only 23% of physicians worked in practices that were partially or fully owned by a hospital, and only 5.6% were directly employed by a hospital.¹

The AMA estimates that 18.4% of physicians worked in solo practices in 2012, a decline of about 6% from the previous AMA survey in 2207/2008.¹ In 1983, 40.5% of physicians were in solo practice.¹

“To paraphrase Mark Twain, the reports of the death of private practice medicine have been greatly exaggerated,” said AMA President Ardis Dee Hoven, MD, in presenting the figures.¹

And AMA investigators Carol C. Kane, PhD, and David W. Emmons, PhD, who authored the report, noted: “After a 5-year gap in physician-level data, the 2012 PPBS offers an update on the status of physician practice arrangements, and allows for a nationally representative response to the numerous articles of the past several years that have highlighted a surge in the employment of physicians by hospitals and the ‘death’ of private practice.”¹

Details of the survey
Like earlier AMA surveys, the PPBS involved a nationally representative random sample of physicians who had completed residency, practiced at least 20 hours per week, and were not employed by the federal government.

Unlike earlier AMA surveys, which targeted AMA members, the 2012 PPBS utilized the Epocrates Honors market research panel rather than the AMA Masterfile. The reason for this switch: declining participation rates for surveys utilizing the Masterfile.

Another distinction: Earlier surveys failed to ask specifically whether the respondent’s practice was owned by its physician members or by a larger entity, such as a hospital. They also overlooked the organizational structure of practices. The 2012 survey addressed both issues.

The PPBS went to 14,750 physicians. Of these, 3,466 physicians responded, a response rate of 28%.¹

FINDINGS ON THE STRUCTURE OF PRACTICE

Ownership status
In 2012, 53.2% of physicians fully or partly owned their practice (a decline of 8.0% since 2007/2008), 41.8% were employed, and 5.0% were independent contractors.¹

Younger physicians were less likely to own their practice than older physicians were. Among physicians under age 40, the ownership rate was 43.3%, compared with 60.0% among doctors aged 55 years or older.¹

Women, too, were less likely to own their practice (38.7% vs 59.6% for men).¹

Type of practice
The most common type of practice setting was the single-specialty practice, reported by 45.5% of physicians. Women were less likely to report single-specialty practice than men (39.7% vs 48.0%).¹

Among ObGyns, single-specialty practice was reported by 52.7% of respondents.¹

Multispecialty practice was reported by 22.1% of respondents. Among ObGyns, that figure was 17.9%.¹

Solo practice was reported by 18.4% of respondents but varied significantly by age. Among physicians under age 40, only 10% reported solo practice, compared with 25.3% of physicians aged 55 or older. Among women, solo practice was reported by 21.0%, compared with 17.3% among men. Among all ObGyns (men and women), 20.6% reported solo practice.¹

Only 5.6% of physicians reported direct hospital employment. Among ObGyns, the figure was 2.3%.¹

Size of the practice
Sixty percent of respondents (in all practice settings) reported working in a practice with fewer than 10 physicians. Sixteen percent reported working in a practice with 10 to 24 physicians, 7.1% in practices with 25 to 49 physicians, and 12.2% in practices with more than 50 physicians. Hospital employees were not asked about the number of physicians in their practice setting.

Among physicians in single-specialty practices, 39.0% reported that their practice included no more than four physicians, compared with 5.3% who reported a practice of at least 50 physicians.¹

Among physicians in multispecialty practice, only 9.9% reported having no more than four physicians, compared with 35.5% reporting at least 50 physicians.¹

Hospital ownership
Twenty-three percent of all respondents reported working in a practice that was at least partially owned by a hospital. Of these physicians, 14.7% worked in practices fully owned by a hospital.

Physicians who worked in a single-specialty practice were more likely to report physician ownership of that practice (71.8%) than were doctors in multi-specialty practice (36.9%). And physicians in small practices (single- or multispecialty) were more likely to report physician ownership than physicians in large practices: 72% of physicians in groups of two to four reported physician ownership, compared with 45.6% of physicians in groups of 50 or more. Physicians in large practices (≥50 members) also were more likely to report ownership by a not-for-profit foundation.¹

After exploring the issue of hospital ownership from several different angles, Kane and Emmons found that the association between increasing practice size and hospital ownership did not persist. Rather, they found that the “wider scope of practice in multispecialty groups, not practice size, drives hospital ownership.” They theorized that hospitals are more likely to buy primary care practices to gain a strong referral base, and this theory was borne out by the data, which showed that primary care physicians are more likely to report hospital ownership.¹

RELATED ARTICLE: Is private ObGyn practice on its way out? Lucia DiVenere, MA (October 2011)

Two final comments
Kane and Emmons point out that their analysis doesn’t “capture relationships that are short of full employment” and, therefore, may underestimate “the degree of integration between physicians and hospitals.”1

Although the decline in solo practice may have been accelerated by reform measures in recent years, the shift was “already well underway in the early 1990s,” Kane and Emmons observed.¹