.jpg "Daniel Godla")
As of January 2024, 77.6% of physicians were employed by hospitals, health systems, or other healthcare organizations compared to leading or owning an independent practice.
However, since the pandemic, the trend has shifted. The number of corporate entities acquiring independent practices has slowed, and more physicians seem to be retaining practice ownership.
A survey conducted by Bain & Co. found that “nearly 25% of physicians in health system-led organizations are contemplating a change in employers, compared to just 14% in physician-led practices.” Among those contemplating a change, 37% are seeking to transition to physician-owned settings.
In this article, we’ll explore the reasons why this shift is happening. We’ll also cover how physician-leaders can generate revenue with care management to stay independent or pursue owning their own practice.
Why have physicians left practice ownership for employment?
While it’s a deeply personal decision for physicians, the trend of leaving or selling private practices has mainly been due to three reasons.
1. Physician pay and reimbursement have declined
A recent Medscape survey of more than 7,000 physicians across 29 specialties found that physician pay growth has been the lowest since 2011. More than half felt underpaid or not fairly paid relative to their jobs.
In fact, 15 physician specialties experienced pay drops ranging from one to 11%, with an average decrease of three percent. Neurology and urology saw a six percent cut; cardiology pay went down by four percent; and gastroenterology, rheumatology, and orthopedic surgery all saw a three percent decline.
Between 2005 and 2021, Medicare reimbursements decreased nearly 2.3%, accounting for inflation. Just last year, the 2025 Physician Fee Schedule saw average payment rates reduced by 2.93%.
2. Malpractice insurance and practice costs have skyrocketed
Independent practices have been particularly impacted by reduced revenue and escalating operational costs. This includes:
- Overhead expenses
- Malpractice insurance premiums
- Staffing shortages
- Rising wage demands
- Supply chain disruptions that persist post-COVID
As healthcare costs have risen faster than inflation, physicians leading or working for independent practices have increasingly transitioned into employment. When inflation and practice expenses are considered, the American Medical Association (AMA) estimates that Medicare physician payments have declined 29% from 2001 to 2024.
3. Prior authorizations and other regulatory and administrative burdens
A 2022 survey of more than 500 physicians from independent practices found that 89% believed regulatory burdens had increased over the past year. Nearly 82% considered the prior authorization process to be very or extremely burdensome.
While physician burnout has dropped below 50% for the first time in five years, physicians are still working more hours to keep up with increasing administrative loads, which is a critical contributor to burnout.
Why are physicians going independent?
The Bain & Co. survey mentioned above highlights how many physicians are exploring the possibility of independent practice again.
Three factors appear to be driving this trend.
1. Physicians are seeking more autonomy
Physicians cite a lack of autonomy as the primary reason for their unhappiness.
A survey from NORC at the University of Chicago found that 61% of employed physicians have moderate or no autonomy to make referrals outside of their ownership system. Nearly 47% said they adjust patient treatment options to reduce costs in line with employer policies or incentives.
This lack of independence is an essential aspect of the “practice of medicine.” Physicians may miss the flexibility to explore new treatment options, participate in research, and implement innovative care models.
2. Physicians are seeking adequate pay and profit-sharing
While physician pay rose by an average of 3.6% in 2024, many specialties experienced cuts.
In Medscape’s survey, 43% of physicians reported a drop in income—despite the overall average increase—coinciding with a 2.93% cut to the CMS Physician Fee Schedule for 2025. Additionally, 62% of those surveyed believed that most physicians are underpaid today.
Some physicians transition to corporate-led employment because of increases in base pay.
However, while hospitals and systems may provide a level of stability, they do not offer the same long-term financial advantages as ownership or leadership in an independent practice.
3. Physicians are seeking more balance and time focused on direct patient care
According to the Physicians Foundation, employed physicians report more inappropriate feelings of anger, fearfulness, or anxiety than independent physicians. They also convey higher levels of burnout (62%) compared to physicians working for or owning an independent practice (53%).
Other research published in the Journal of the American Board of Family Medicine found that physician burnout within independent practices was only 13.5%, which is lower than for employed physicians.
The AMA’s national physician comparison report shared that 12.7% of physicians surveyed blamed too many administrative tasks for job stress. This includes a lack of support staff and no time or additional payment for administrative work.
Care management can help physicians with independent practice
Physicians looking to return to independent practice—whether through employment or ownership—need a strategy to mitigate the factors that led them to join corporate healthcare. Additionally, physicians who wish to maintain their own independent practices require methods to diversify income, foster patient loyalty, and innovate in the face of competition and regulatory pressures.
Care management programs, such as Chronic Care Management, Advanced Primary Care Management, Remote Patient Monitoring, and Annual Wellness Visits, can engage patients and improve outcomes while creating critical revenue.
For example, here’s what an average-size Chronic Care Management program could generate annually:
Advancements in virtual care, the expansion of non-physician roles, and automation technologies enable physicians and their care teams to implement these programs.
ThoroughCare equips independent practices for care management
ThoroughCare, a leader in care management best practices, supports independent practices with trusted clinical advisory services and a software platform that simplifies compliance.
ThoroughCare offers:
- Comprehensive care planning tools
- Evidence-based assessments (lifestyle, health risks, behavioral conditions, SDOH)
- Automated billing code assignment with audit trail
- Data integration across EHRs, HIEs, remote devices, and advance care plans
- Analytics to report on care performance and operations
Key questions answered
Why did physicians leave private practice to become employees of hospitals, health systems, or other corporate healthcare organizations?
There are three primary reasons why physicians transitioned into corporate-owned healthcare, including:
- Physician pay and reimbursement have declined
- Malpractice insurance and practice costs have skyrocketed
- Prior authorizations and other regulatory and administrative burdens
However, research indicates that this trend is shifting, with more physicians returning to independent practices as either employees or owners.
Why are some physicians looking to return to private practice?
Three factors appear to be driving the trend of physicians wanting to return to independent practices:
- Physicians want more autonomy
- Physicians want adequate pay and profit-sharing
- Physicians want more balance and time focused on direct patient care
Choosing to work for or own an independent practice is a deeply personal decision that more physicians are choosing.