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The Rebirth of Private Practice Physicians: Understanding Trends in Physician Employment

Huddle+ | Huddle #Trends

Is there such a thing anymore as the private practice physician?

Yes, of course. But they’re becoming a rarer breed. Physician employment, as we know, is becoming more corporatized. Whether this is a good thing or a bad thing is up to your interpretation. However, to form a solid opinion on the matter, it’s important first to understand the trends.

Huddle #Trends are monthly reports dissecting key healthcare trends that impact patients, physicians, and the system. Exclusive to Huddle+ members.

First, Some History of Physician Employment

In the early 20th century, physicians commonly operated solo practices, forming deep personal connections with their patients. These small, independent offices were the cornerstone of healthcare, where doctors intimately knew each patient’s history. Home visits were a significant part of care delivery—physicians often visited patients in their homes, carrying a satchel of exam tools and medications. This personalized approach allowed them to evaluate and treat patients in the comfort of their own homes, fostering a strong doctor-patient relationship.

Fast-forward to the 1970s and 80s, when we saw the rise of Health Maintenance Organizations (HMOs). HMOs introduced a more organized and preventative approach to healthcare, with an emphasis on cost control and efficiency. This period marked the beginning of a trend in which physicians started joining group practices and larger healthcare organizations.

We then arrive at the 1990s and 2000s, when we see the emergence of Physician Practice Management Companies (PPMs or PPMCs), which played a role similar to that of private equity firms today. These companies acquired and managed multiple physician practices, offering administrative support and economies of scale. While this allowed physicians to focus more on patient care, it also marked a step towards the corporatization of medical practice.

Around the same time in the 1990s and early 2000s, hospital employment became a prominent trend, with many physicians opting to become employees of larger health systems. This move was driven by the allure of stable salaries, benefits, and improved work-life balance.

Fast forward to now.

Physician Employment Trends

Hospital and corporate physician employment is approaching 80%, increasing by 25% between January 2019 and January 2024. In other words, nearly eight in ten physicians now work for a hospital, health system, or corporate entity such as an insurer, retailer, or private equity firm.

Source: PAI-Avalere Report on Physician Employment Trends and Acquisitions of Medical Practices:  2019-2023

Breaking it down further, 55% of physicians were employed by hospitals or health systems in January 2024, up approximately 20% from January 2019. Similarly, around 23% of physicians were employed by a corporate entity in January 2024, marking a nearly 50% increase from January 2019. Yes, you read that right—50%.

In the remainder of this report, I dive further into the history of physician employment, reveal the current trends, highlight the corporatization of American healthcare, and discuss whether we can revive the “private practice physician.”

My full exploration of physician employment trends and the potential rebirth of the private practice physician is exclusive to Huddle+ subscribers. 

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