Physician Staffing Blog

Healthcare News and Trends

A Growing Number of Physicians are Employed

May 06, 2022

By Phillip Miller

Marcus Welby – the classic, independent family physician who followed his patients from the cradle to old age – is an icon from the past.

For years, a growing number of physicians have become employees while a dwindling number have remained independent practice owners or partners. A new study commissioned by the Physicians Advocacy Institute and conducted by Avalere Health puts some startling numbers to this trend.

According to the study, three quarters of all physicians (74%) now are employed by a hospital, health system or a corporate entity. The study notes that 52.1% of physicians now are employed by a hospital or health system, with the number of hospital/health system employed physicians growing by 11% from July 2020 to January 2022. This presumably includes physicians employed directly by hospitals and health systems and those employed by hospital and health system-owned medical groups, the number of which is increasing. According to the study, the number of hospital-owned physician practices grew by 8% during the study period.

The study indicates there also was a significant increase in the number of physicians employed by corporate entities such as insurance companies and investor groups. During the same period from July 2020 to January 2022, the percentage of physicians employed by corporate entities grew from 15.3% to 21.8%. Optum, owned by insurance giant UnitedHealth Group, alone employs approximately 55,000 physicians, or about 6.5% of the roughly 850,000 physicians actively providing patient care.

In its annual Review of Physician and Advanced Practitioner Recruiting Incentives, Merritt Hawkins tracks the number of physician search engagements it conducts featuring employed settings versus independent practice settings. The Review indicates that the great majority of physicians accepting new positions today – more than 90% -- will practice as employees and not as independent practice owners/partners. By contrast, in 2001, the number was approximately 60%.

The increasing corporatization of medicine is being driven by a number of factors, including the rising complexity and financial uncertainty of running a medical practice, both of which have been exacerbated by COVID-19. The result is that most physicians today are a part of large and consolidating organizations rather than small, independently owned businesses.

Phillip Miller is Senior Principal of Thought Leadership for AMN Healthcare, the nation’s leader and innovator of healthcare workforce solutions. Merritt Hawkins is a division of AMN Healthcare. He can be reached at phil.miller@amnhealthcare.com.