CHICAGO — Less than half of patient care physicians had an ownership stake in their medical practice, according to a newly updated study on physician practice arrangements by the American Medical Association (AMA). This marks the first time that physician practice owners fell below a majority portion of the nation’s patient care physicians since the AMA began documenting practice arrangement trends.

The share of patient care physicians with ownership stakes in a medical practice declined 6 percentage points to 47.1 percent in 2016 from 53.2 percent in 2012. In contrast, the share of patient care physicians with employed positions increased about 5 percentage points to 47.1 percent in 2016 from 41.8 percent in 2012. As a result, there were equal shares of physician employees and physician practice owners in 2016, while 5.9 percent of patient care physicians were independent contractors.

The preference of younger physicians toward employed positions has had a prominent impact. Nearly two-thirds (65.1 percent) of physicians under age 40 were employees in 2016, compared to 51.3 percent in 2012. The share of employees among physicians age 40 and older also increased between 2012 and 2016, but at a more modest pace than younger physicians.

“Patients benefit when physicians practice in settings they find professionally and personally rewarding, and the AMA strongly supports a physician’s right to practice in the setting of their choice,” said AMA President Andrew W. Gurman, M.D. “The AMA is committed to helping physicians navigate their practice options and offers innovative strategies and resources to ensure physicians in all practice sizes and setting can thrive in the changing health environment.”

Whether physicians are owners, employees, or independent contractors varied widely across medical specialties in 2016. The surgical sub-specialties had the highest share of owners (59.3 percent) followed by radiology (56.3 percent). Emergency medicine had the lowest share of owners (27.9 percent) and the highest share of independent contractors (24.8 percent). Pediatrics was the specialty with the highest share of employed physicians (58.3 percent).

While the majority of patient care physicians (55.8 percent) worked in medical practices that were wholly owned by physicians in 2016, this majority decreased from 60.1 percent in 2012. Although this share is more than 4 percentage points lower than that of 2012, most of this change occurred between 2012 and 2014. Physician movement toward hospital-owned practices and direct hospital employment appears to have slowed since 2014. The share of physicians who worked directly for a hospital, or in practices with at least some hospital ownership, was the same in 2014 and 2016 — 32.8 percent.

Despite challenges posed by a changing health care landscape, most physicians (57.8 percent) provide care to patients in small practices of 10 or fewer physicians. There were signs of a gradual shift toward larger practices. In 2016, 13.8 percent of physicians were working in practices with 50 or more physicians compared to 12.2 percent in 2012.

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.