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For the first time in the United States, employed physicians outnumber self-employed physicians, according to a newly updated study on physician practice arrangements by the American Medical Association (AMA). This milestone marks the continuation of a long-term trend that has slowly shifted the distribution of physicians away from ownership of private practices.

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Employed physicians were 47.4% of all patient care physicians in 2018, up 6% points since 2012. In contrast, self-employed physicians were 45.9% of all patient care physicians in 2018, down 7% points since 2012. Changes of this magnitude are not unprecedented. Older AMA surveys show the share of self-employed physicians fell 14% points during a six-year span between 1988 and 1994.

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Given the rate of change in the early 1990s, it appeared a point was imminent when employed physicians would outnumber self-employed physicians, but the shift took much longer than anticipated. The AMA's research notes this example and suggests "caution should be taken in assuming current trends will continue indefinitely."

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The majority of patient care physicians (54.0%) worked in physician-owned practices in 2018 either as an owner, employee, or contractor. Although this share fell from 60.1% in 2012, the trend away from physician-owned practice appears to be slowing since more than half of the shift occurred between 2012 and 2014.

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Concurrently, there was an increase in the share of physicians working directly for a hospital or in a practice at least partly owned by a hospital. Physicians working directly for a hospital were 8.0% of all patient care physicians, an increase from 5.6% in 2012. Physicians in hospital-owned practices were 26.7% of all patient care physicians, an increase from 23.4% in 2012. In the aggregate, 34.7% of physicians worked either directly for a hospital or in a practice at least partly owned by a hospital in 2018, up from 29.0% in 2012.

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Younger physicians and women physicians are more likely to be employed. Nearly 70% of physicians under age 40 were employees in 2018, compared to 38.2% of physicians age 55 and over. Among female physicians, more were employees than practice owners (57.6% vs. 34.3%). The reverse is true for male physicians, more were practice owners than employees (52.1% vs. 41.9%).

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"Transformational change continues in the delivery of health care and physicians are responding by reevaluating their practice arrangements," said AMA President Barbara L. McAneny, M.D. "Physicians must assess many factors and carefully determine for themselves what settings they find professionally rewarding when considering independence or employment. The AMA stands ready to assist with valuable resources that can help physicians navigate their choice of practice options and offers innovative strategies and resources to ensure physicians in all practice sizes and settings can thrive in the changing health environment."

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As in past AMA studies, physicians' employment status varied widely across medical specialties in 2018. The 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%).

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Despite challenges posed by dynamic change in the health care landscape, most physicians still work in small practices. This share has fallen slowly but steadily since 2012. In 2018, 56.5% of physicians worked in practices with 10 or fewer physicians compared to 61.4% in 2012. This change has been predominantly driven by the shift away from very small practices, especially solo practices, in favor of very large practices of 50 or more physicians.

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The new study is the latest addition to the AMA's Policy Research Perspective series that examines long term changes in practice arrangements and payment methodologies. The new AMA study, as well as previous studies in the Policy Research Perspective series, is available to download from AMA website.