The most recent AMA Benchmark Survey looking at how clinicians are employed shows that employment models continue to evolve. Data demonstrates that the dual trends of increased employment and decreased private practice ownership continue unabated. Indeed, the number of employed doctors has exceeded the number of self-employed for the first time.

According to the AMA, 2019’s numbers reflect a long-term trend that has been observed for years. It was only a matter of time before clinician employment surpassed private practice ownership. At the same time, the survey did offer some surprising results. For example, discovering who actually employs the vast majority of clinicians is somewhat eye-opening.

The Survey by the Numbers

The most important statistic from the survey is this: 47.4% of all patient care clinicians active in 2018 were employed by some sort of healthcare entity. Just 45.9% were self-employed as private practice owners. It is assumed that the remaining cliniciansworked for a physician staffing provider such as TivaHealthcare.com

The numbers represent a 6% increase for employed doctors. As for the self-employed, their numbers fell some 7%. That is quite a swing when you combine the two together.

Next up are the number identifying as physician employers. According to the survey:

  • Physician-owned practices account for 54% of physician employment
  • Facilities partially owned by a hospital account for 34.7%
  • Facilities fully owned by hospitals account for 26.7%
  • Direct hospital employment accounts for 8%.

The first statistic in this list is the most surprising. Where you might have thought that the majority of employed doctors are working for hospitals or hospital-ownedgroups, that is not the case. They are employees of other physicians who own their practices.

It Matters to Hospitals

When you combine the final three statistics in the above list, you realize that 69.4% of all employed doctors provide at least part-time service to a facility that is in some way related to a hospital – whether that means working at a hospital or a facility that is fully or partially owned by a hospital. This is no small thing.

It matters to hospitals because the doctors in question have incentive to refer patients to local hospitals for lab tests, specialist services, etc. This explains why hospital groups are willing to make no money on primary care – or even lose money if need be. They make up the difference via more patients coming through their facilities for other services.

This reality has the opposite effect on independent providers. Independent labs, for example, should see a reduction in business as a result of doctors referring more of their patients to hospital-based services. If employment trends continue, it might become more difficult for independent providers to keep up.

Why the Shift

A question that constantly emerges whenever one of the surveys is released is simply, “why?” What is fueling the shift away from private practice in favor of employment? There could be any number of factors, beginning with the desire among clinicians to practice medicine rather than run a business.

There is a lot to be said for private practice ownership in terms of being your own boss and having total control over your career. But running a practice is a lot of work. A clinician can spend as much time on the business side of things as he/she does actually treating patients. And for a lot of doctors, the freedom of self-employment is not all it is cracked up to be.

Data shows that the employment models among America’s physicians are changing. They are evolving as the practice of medicine evolves. It is not right or wrong; it just is.