Private Practice “Unraveling” According to New AMA Report
Originally published on October 24, 2025
Private medical practices continue to decline across the healthcare industry as physicians face mounting financial and administrative pressures, according to new research from the American Medical Association (AMA). The organization’s latest report reveals a stark transformation in physician practice ownership patterns, with implications for both healthcare providers and patients.
The Decline of Physician-Owned Practices
The AMA’s “Physician Practice Characteristics in 2024” report, published May 29, 2025, documents a continuing downward trend in private practice ownership. Currently, only 42.2% of physicians work in practices wholly owned by physicians—a significant 18 percentage point decline from 60.1% in 2012.
Dr. Bruce A. Scott, AMA President, described the situation bluntly: “The share of doctors working in practices wholly owned by physicians is unraveling under compounding pressures.”
Perhaps most concerning for the future of independent practice, 2024 marked the first year where fewer than half (47.4%) of physicians worked in practices with 10 or fewer doctors. This represents a dramatic shift from the early 1980s when approximately 80% of physicians practiced in such settings, according to the American Hospital Association.
Three Key Factors Driving Consolidation
The AMA report identifies three primary reasons physicians are moving away from independent practice toward hospital or corporate ownership:
- The need for stronger negotiating power with insurance companies
- Improved access to costly resources and technology
- Better management of administrative and regulatory requirements
These factors aren’t new—they’ve been cited consistently over the past decade. According to the report’s author, Carol K. Kane, PhD, “These are longstanding issues that have contributed to the erosion of physicians in small, physician-owned practices and continue to do so.”
Dr. Scott highlighted a particularly troubling financial reality: “After adjusting for inflation in practice costs, Medicare physician payment has fallen 33% over the past quarter century, which has severely destabilized private practices and jeopardized patients’ access to care.”
This aligns with revenue cycle management challenges faced by many independent practices, where reimbursement rates fail to keep pace with rising operational costs.
The Changing Face of Practice Ownership
Beyond the overall decline in private practice, the report reveals significant shifts in practice structure:
- Single-specialty practices still account for the largest share of physicians (37%), but the gap with multi-specialty practices (27.8%) has narrowed considerably from 23% in 2012 to just 9% in 2024
- Only 35.4% of physicians now hold an ownership stake in their practice, down from 53.2% in 2012 and an estimated 76% in the early 1980s
- Private equity ownership is accelerating, with 38% of physicians in private equity-owned practices reporting acquisition within the past five years
These trends reflect fundamental changes in how healthcare services are organized and delivered. As practice structures change, physicians face difficult decisions about their professional futures.
Impact on Patients and Healthcare Delivery
The consolidation trend raises important questions about healthcare access and cost. Research cited in the AMA report indicates that “markets with larger physician practices and with a greater degree of physician-hospital consolidation have higher prices for physician services.”
This suggests that while consolidation may help practices stay financially viable, it could potentially lead to higher healthcare costs for patients and payers. The impact on care quality and patient access remains a subject of ongoing research and debate.
The Centers for Medicare & Medicaid Services (CMS) has attempted to address some of these issues through value-based payment models, but the AMA report suggests these efforts have not yet reversed the fundamental economic pressures facing independent physicians.
Can Independent Practice Survive?
The continued decline of physician-owned practices raises important questions about the future of healthcare delivery. While the data suggests a challenging environment for independent practitioners, it’s worth noting that many physicians continue to value the autonomy and patient relationships that private practice can offer.
Specialists like ophthalmologists, orthopedic surgeons, and dermatologists have maintained higher rates of independent practice than primary care physicians, suggesting that certain practice models may remain viable in specific specialties.
For practices seeking to maintain independence, exploring alternative payment models, optimizing practice efficiency, and considering strategic partnerships may offer pathways to sustainability without full consolidation.
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