As physicians continue to re-evaluate their career strategies, clinical laboratories must closely monitor changes to test ordering from formerly self-employed doctors

For the first time, more doctors are employed by health networks than are in private practice. That’s according to a recent report from the American Medical Association (AMA). In a press release, the AMA describes the event as “the continuation of a long-term trend that has slowly shifted the distribution of physicians away from ownership of private practices.”

This trend impacts independent clinical laboratories and anatomic pathology groups because hospital-based physicians have reasons to order tests from in-house medical laboratories. Thus, a reduction in independent self-employed doctors could also mean reductions in test orders from those physicians.

To make its conclusions, the AMA drew on six years’ worth of Physician Practice Benchmark Survey data, gathered from 2012-2018. In its published Policy Research Perspectives report, the AMA describes the findings as “one of the more dramatic changes over this six-year span.”

Independence versus Employment

According to the new release, employed physicians made up 47.4% of all patient care doctors in 2018—an increase of 6% since 2012. Meanwhile, self-employed doctors represented 45.9% of physicians in patient care—down 7% (from 53.2%) since 2012. 

“Due to this swing, for the first time in 2018, there were fewer physician owners than employed physicians,” the AMA researchers wrote in their report.

The AMA has conducted its benchmark surveys every other year since 2012. They are nationally representative surveys of doctors to record employment status, practice size, specialties, and ownership.

“Change continues in the delivery of healthcare and physicians are responding by re-evaluating their practice arrangements. Physicians must assess many factors and carefully determine settings they find professionally rewarding when considering independence or employment,” said Barbara L. McAneny, MD, FASCO, MACP (above), in the AMA news release. McAneny is a board-certified medical oncologist/hematologist, President of the American Medical Association, and CEO/co-founder of New Mexico Cancer Center. (Photo copyright: HMP.)

Who Employs Doctors?

Physicians can be employed by other doctors in physician-owned practices, by hospitals directly, and by hospital-owned medical practices. 

Most, however, work for other doctors, reported Fierce Healthcare. In a summary of the latest AMA survey data, Fierce noted that:

  • 54% of doctors are owners, employees, or contractors in practices owned by physicians—compared to 60% in 2012;
  • 8% of doctors work directly for a hospital—up from 5.6% in 2012;
  • 26.7% of doctors are employed by hospital-owned practices—up from 23.4% in 2012; and
  • 34.7% of doctors work for a hospital or a practice partly owned by a hospital in 2018—up from 29% in 2012.

The AMA partly attributed the increase in employed physicians to age: 70% of doctors under the age of 40 reported as employees in 2018, compared to 38.2% of doctors 55 and over who reported as employed.

Family Practice Physicians Most Likely to Become Employed by Hospitals

Other intriguing data points include the percentages of practice ownership among medical specialties.  

Pathology was not broken out. However, the AMA’s report did state that, “surgical subspecialties had the highest share of owners (64.5%) followed by obstetrics/gynecology (53.8%) and internal medicine subspecialties (51.7%).

“Emergency medicine had the lowest share of owners (26.2%) and the highest share of independent contractors (27.3%). Family practice was the specialty with the highest share of employed physicians (57.4%),” the report concluded.

The AMA researchers also noted that the number of doctors seeking employment in healthcare networks may be decreasing. “The trend away from physician-owned practices and toward working directly for a hospital or for a hospital-owned practice appears to be slowing—more than half of that shift occurred in the first two years of [the benchmark survey] period [2012 to 2018].”

The AMA also noted that the success or failure of accountable care organizations (ACOs) could have an effect on hospital acquisition of private practices. “Should evolving models of care not deliver on their theoretical savings or improvements, that might put a break on consolidation,” the researchers wrote.

It’s critical that clinical laboratories continue to improve the quality and efficiency of outreach services to retain and grow medical laboratory testing business that increasingly may come from health networks versus physician-owned private medical practices.    

—Donna Marie Pocius

Related Information:

2018 Benchmark Survey and Policy Research Perspective (PDF): Updated Data on Physician Practice Arrangements: For the First Time, Fewer Physicians Are Owners Than Employees

Employed Physicians Outnumber Self-Employed

For the First Time, Employed Physicians Outnumber Self-Employed Doctors, AMA Study FindsEmployed Physicians Now Outnumber Self-Employed Doctors