While physicians are increasingly opting for employed models, some are unhappy with employment and are pivoting back to private practice.
According to a survey from consulting firm Bain & Co., nearly 25% of physicians in health system-led organizations are contemplating a change in employers, compared to just 14% in physician-led practices. Notably, of those considering a switch, 37% are looking to move to physician-owned settings.
“We’ve seen this trend empirically,” Jeremy Shiner, founder and CEO of Myriad Systems, a provider of AI-driven healthcare practice management solutions, told Becker’s. “This shift is evident not only in direct primary care and physician-led concierge practices but also among providers who might not appear in the statistics — those working in hospitals while also running concierge practices on the side. The common assumption that private healthcare is disappearing in favor of hospital systems isn’t as clear-cut when we observe what’s happening in the field with our clients.”
Mr. Shiner has observed several factors driving this trend: autonomy, quality of care and physician burnout.
“Providers increasingly feel they’re losing control over care quality and patient outcomes — the very reasons they entered medicine in the first place,” Mr. Shiner said. “Instead of a simple consolidation trend, we’re seeing a bifurcation in healthcare. While large hospital systems and corporate entities offer accessibility and advanced medical equipment, there’s also a growing push for more personalized, patient-centered care in physician-led practices. Patients are driving this shift as well, seeking stronger relationships with their doctors and, in some cases, premium concierge care.”
Mr. Shiner told Becker’s that the statistics on physician employment are often skewed, as many physicians working in hospitals offer concierge care or other ancillary services on the side.
“It’s an interesting phenomenon, and one that isn’t widely discussed, partly because many doctors aren’t advertising it,” he said. They’re not necessarily violating contracts, but they also aren’t broadcasting the fact that they split time between hospital shifts and their own private practice.”
Many physicians do this for financial and professional reasons, Mr. Shiner said. From a data perspective, this group often gets overlooked. When surveys ask, “Do you work at a hospital?” they answer yes even if they are simultaneously moving toward independent practice.
“We see this most frequently with providers working in nursing homes,” he said. “They may be contracted with a nursing home, operate under a separate billing module and EHR system, and then provide concierge care or home visits on the side. We’ve worked with at least 30 to 40 practices set up this way, and many more have approached us to explore the logistics of transitioning to independent practice.”
An increase in consolidation is often linked to a lack of 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 of their practice or ownership system, and 47% said they adjust patient treatment options to reduce costs based on practice policies or incentives.
The Bain & Co. survey found that 81% of physicians in physician-led organizations were satisfied with their involvement in strategic decision-making, compared to just 50% of those in health system-led practices.
“’The traditional belief was that healthcare corporations and hospital systems may offer lower levels of care but at more affordable patient rates,” Mr. Shiner said. “However, the latter hasn’t really materialized.”
A study published Jan. 17 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. Additionally, 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 patients treated in hospital-affiliated practices.
“Now, as hospital resources, private equity, venture capital and other investors continue to streamline operations in mid-to-large scale healthcare management systems, and with implementation of the technologies we’ve been discussing, it’s possible that patient costs in these settings could come down in the future.” he said. “However, for now, what these systems primarily offer is accessibility — which is important. We want patients to have access to care when they need it.”
Some physicians, seeking greater control over their practice, are opting out of employed models. Benjamin Stein, MD, co-founder and chairman of ASC development firm Capital Surgical Solutions, pursued independence after witnessing the changes at a former employer following its acquisition by a larger company.
“It was an instant ignition for me,” Dr. Stein told Becker’s. “I knew it wasn’t good, and I knew other people felt the same way. So I wanted to create a system that addressed those issues.”
Other physicians have followed a similar path. Susan Baumgaertel, MD, an internal medicine physician in Seattle, spent 25 years at The Polyclinic, a multispecialty practice that is now owned by Optum. As the practice grew under corporate ownership, she felt increasingly constrained in her ability to make clinical and operational decisions in the best interests of her patients and staff.
Following Optum’s acquisition, “everything was always ‘grow bigger, grow bigger, grow bigger,’ because growing bigger meant that we would be a bigger fish in the pond, which means it would be more favorable when we negotiated contracts with insurers,” she told Becker’s.
Dissatisfied with the loss of autonomy, she left The Polyclinic in 2021 to launch myMDadvocate, an independent telemedicine and healthcare navigation practice.
As physicians weigh the trade-offs between autonomy, financial stability and patient care quality, the resurgence of private practice suggests that the employed model could soon no longer be the default career path.
