Young physicians are entering the job field with three employment options: owner, employee or partner, the American Medical Association laid out in a June 2 post.
Here's what physicians need to know about ownership, partnership and employment:
A solo practice offers both the most autonomy and the most risk, according to the AMA. Private practice physicians have a lot of power — they run the books, control staffing decisions and manage schedules.
The number of physicians in private practice is quickly declining, with more than 108,700 physicians shifting to employment models from 2019 to 2021, according to a report from Avalere. This shift is concerning many physicians who feel private practice is the option where physicians can provide the most appropriate care.
"Small private practices give physicians the ability to provide the best care for their patients and to adapt to changes quickly and effectively," Joseph Anderson, MD, professor of medicine at Dartmouth Geisel School of Medicine in Hanover, N.H., told Becker's. "Small private practices are the lifeblood of U.S. medicine, and their ability to survive is vital to healthcare in this country."
However, choosing private practice is risky as the increasing cost of equipment, labor and supplies doesn't correlate to increases in reimbursements.
"Newer physicians will face increasing pressures on maintaining revenues to meet the equity partners' expectation for returns on their investment for buy out," David Johnson, MD, a gastroenterologist in Norfolk, Va., told Becker's.
There's also the option to partner up in a group practice, AMA wrote. This option offers a measure of autonomy without the same level of freedom seen in private practice.
Larger groups allow for physicians to access economies of scale in an increasingly consolidated industry. The trend toward partnering in management service organizations and "megagroups" is increasingly popular in specialties such as gastroenterology and orthopedics.
Employed physicians often see a lower level of risk, part of the reason why the number of employed physicians rose during the COVID-19 pandemic. As of January 2022, nearly 74 percent of physicians reported being employees, leaving 26 percent still in private practice, according to Avalere.
While employed models traditionally offer less autonomy, the current labor market might be shifting that trend, according to the AMA. Because the market is so tight, employers are often more open to offering autonomy.