Three Physician Practice Ownership Trends to Watch

My favorite biennial healthcare report is out, and as always, it never fails to disappoint from a news standpoint. I’m talking about the American Medical Association’s latest biennial report on who owns physician practices. The report for me is one of the most accurate barometers of the direction of the healthcare industry.

Just as I said this time two years ago in this blog post: “As Physician Ownership Goes, So Goes the Healthcare Industry”

The AMA has been producing the report every other year since 2012. Not even the COVID-19 pandemic stopped its release in 2022. The 2024 version, released May 29, is based on a survey of 5,000 physicians. That’s up from the usual 3,500 physicians in past reports.

So, what’s the big news from this year’s report? Three things jumped out at me.

First, the percentage of physicians who are employees of whoever owns their practice jumped to 57.5% last year. That’s up from 49.7% from 2022. That’s a nearly 16% increase. In fact, the 2022 figure was off slightly from 50.2% in 2020. That led me to the false conclusion that more doctors were tired of working for someone else, and we might see that percentage continue to decline. Boy, was I wrong. It was more of a pause in an overall trend, and the upward trend in doctors becoming employees bounced back in a big way last year.

Second, we finally started to see private equity’s growing presence in the numbers. The report said 6.5% of doctors worked in medical practices owned by PE firms in 2024. That’s up from 4.5% in 2022 and 4.4% in 2020. The AMA didn’t ask the PE ownership question in its survey prior to 2020.

Third, money again was first. It was the No. 1 reason private physician practices sold out to corporate owners like hospitals, health systems, health insurers and PE firms in 2024. Some 70.8% of physicians who sold their private practices to a corporate owner cited “better negotiate higher payment rates with payers” as an “important” or “very important” reason for their decision. That’s down from 79.5% who said the same thing in 2022, but cash still was king.

If you’re wondering why medical care is getting more expensive and less affordable for consumers, look no further than the trends in this biennial AMA report. More physicians are working for someone else, and that someone else didn’t buy their practices to lose money or break even. It’s a business after all.

Thanks for reading.