As Trump Cuts Healthcare, Private Equity Gains Hold At Doctor’s Office
The American Medical Association says the share of physicians working in private practices was 42.2 … More
Just two in five U.S. physicians are in doctor-owned private practice as hospitals and private equity firms gobble up physician groups thanks in part to cuts in insurance payments to medical care providers that are about to get even worse.
The American Medical Association, the nation’s largest physician group, says in a new report that the share of physicians working in private practice was 42.2% last year, which is a sharp decline from more than a decade ago when more than 60% — or three in five doctors – were in private practice, which the AMA defines as a “practice wholly owned by physicians.”
The AMA’s analysis blames flat to falling payments from health insurance companies and government health programs like Medicare coverage for the elderly and Medicaid coverage for low-income Americans among the reasons physicians are selling to hospitals, health systems and private equity. In addition, AMA says its data cites “costly resources, and burdensome regulatory and administrative requirements” as “longstanding and important drivers of this change.”
“The share of doctors working in practices wholly owned by physicians is unraveling under compounding pressures,” said AMA President Dr. Bruce A. Scott said.
“The cumulative impact of burdensome regulations, rising financial strain, and relentless cuts in payment poses a dire threat to the sustainability of private practices,” Scott said. “After adjusting for inflation in practice costs, Medicare physician payment has fallen 33 percent over the past quarter century, which has severely destabilized private practices and jeopardized patients’ access to care. Payment updates are necessary for physicians to continue to practice independently.”
But there appears to be little interest by the Republican-controlled Congress to boost payments to physicians.
The AMA report comes as Republicans in Congress and the Donald Trump White push for more cuts in federal health insurance programs, including Medicaid and Medicare, which would most certainly spill over onto doctor practices as more Americans lose health insurance.
Last week, a new analysis published by the Robert Wood Johnson Foundation of the budget reconciliation bill passed by the U.S. House of Representatives shows physicians and other healthcare providers “could lose more than $770 billion in revenue over the next decade as a result of more than 11 million people losing health coverage through Medicaid and the Affordable Care Act marketplaces.” The budget still faces approval by the U.S. Senate and would need to be signed into law by Trump.
Meanwhile, more and more physicians are working for hospitals or companies owned by private equity no matter their medical discipline.
“Private practices now account for less than half of physicians in most medical specialties, ranging from 30.7 percent in cardiology to 46.9 percent in radiology,” the AMA said of its report. “Exceptions included orthopedic surgery (54 percent), ophthalmology (70.4 percent), and other surgical subspecialties (51.2 percent).”
The share of physicians working in hospital-owned practices increased to more than one-third, or 34.5 percent last year.
“Twelve percent of physicians were employed directly by a hospital (or contracted directly with a hospital), double the share (5.6 percent) in 2012,” the AMA said. “In 2024, 6.5 percent of physicians characterized their practice as private equity-owned, higher than the shares in 2020 and 2022, which were both around 4.5 percent, the report noted.”