The private practice exodus

The number of physicians who practice privately is steadily falling. But why?

In 2022, just 26% of physicians were in private practice, according to a report from Avalere.

Also in 2022, only 44% of physicians owned their practice, according to an American Medical Association report. Compare this with 76% in the early 1980s.

Where are all the private practice physicians going? 

"Private practice healthcare providers are the cornerstone of our American healthcare system and play a critical role in ensuring wider patient access to high-quality, affordable care," Jack Feltz, MD, chief medical executive officer for Unified Women's Healthcare, told Becker's. "The ever-increasing administrative burdens, regulatory disadvantages and complexities of delivering quality healthcare are driving many private practitioners, reluctantly, out of practice or to health system employment. This has not been shown to necessarily improve quality but often increases the overall cost of care in an already unaffordable healthcare environment. If this trend continues, it is unlikely private practice, with all its benefits to society, will survive."

These burdens in conjunction with economic pressures make it especially hard for younger physicians, or those who have recently graduated, to practice privately. The same AMA report found that the number of physicians younger than 45 who were self-employed decreased by 13 percentage points in 2022.

The payer landscape also has a big impact on how physicians decide to practice. According to the AMA report, 80% of physicians said the ability to negotiate higher payment rates with insurance companies influenced their decision to sell their practice.

"Private practice is under attack from various fronts and will eventually succumb to defeat," Ismar Dizdarevic, MD, an orthopedic surgeon at Ridgewood (N.J.) Orthopedic Group, told Becker's. "It will impact access to quality healthcare as we perceive it today, not just in the private practice realm but all models of healthcare, as it will diminish the leverage physicians have in any negotiations."

However, just because private practice is declining, it does not mean that it will disappear entirely. Many physicians remain hopeful and are steadfast believers in the private practice model. 

"I'm a direct primary care family physician, and our future looks great," James Tinsley, MD, family physician at Lighthouse Direct Primary Care in Newport News, Va., told Becker's. "I opened my practice in 2019, six months before COVID-19. We were the first direct primary care practice in our area. There are four now. Even with the laws against free market medicine … we are still growing and thriving as are other practices. My patients get same/next day 30- to 60-minute visits and unlimited visits without a copay. We also shop for medical care and make it affordable for them. As a reward, I get to be the physician I always wanted to be. I truly love my job." 

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