Trump's healthcare reduction sparks increased influence of private equity in medical practices
Losein' Grip: The Decline of Private Doc Practices
Looks like just under half of U.S. physicians are rockin' it solo in private practice these days, with hospitals and private equity firms snagging up the rest. And things ain't lookin' too hot for the independent docs, thanks to a cocktail of insurance payment cuts, regulatory red tape, and the rise of hospital and private equity ownership.
The American Medical Association (AMA), the country's sweetest soundin' physics gang, is soundin' the alarm in a brand new report. Last year, the number of docs in private practice shrank to 42.2%, down from over 60% a decade ago. The AMA defines private practice as a practice that's wholly owned by docs. Y'know, the good ol' days.
The AMA's warnin' that the insurers are rapin' 'em dry, and not just because they got the decibels on that. Flat or fallin' insurance payments, Medicaid for the poors and Medicare for our seniors, are cited as reasons why docs are sellin' out to hospitals, health systems, and private equity firms. The AMA's tale also mentions "costly resources," and "burdensome regulatory and administrative requirements" as reasons for the change.
AMA President Dr. Bruce A. Scott, said, "The wagon train of private doc practices is unravelin' under a barrage of challenges." Dr. Scott went on to say, "The relentless cuts in pay and the pile of regulations threatens the sustainability of independent practices and puts patients' access to care at risk. Bumps in payments are necessary if docs are gonna keep their independence going."
But it seems like the Republican-controlled Congress is more concerned with cuttin' the federal insurance programs, Medicaid and Medicare, rather than boostin' payments to docs. And with the Trump crew pushin' for more cuts, it's just gonna make things even harder for those independent docs.
Last week, a fresh piece of analyze showed that healthcare providers could take a $770 billion revenue hit over the next decade as more than 11 million people lose health coverage through Medicaid and the Affordable Care Act exchanges. But it ain't all bad news—more and more physicians are findin' themselves workin' for hospitals or private equity firms, regardless of their medical discipline.
The AMA said that private practices now account for less than half of physicians in most specialties. For example, only 30.7% of cardiologists are in private practice these days, while radiology clocks in at 46.9%. Ophthalmologists and other surgical subspecialties have managed to hang on with 70.4% and 51.2% respectively, but most other specialties are witnessing a decline in private practice. The AMA reports that the number of physicians employed directly by a hospital or contracted with one doubled from 5.6% in 2012 to 12% in 2020. In 2024, 6.5% of physicians characterize their practice as private equity-owned, according to the AMA report.
Long story short, the independent practice life is gettin' tougher, and it ain't gettin' any easier for those docs who wanna keep it that way. So buckle up, America!
The Trump administration's healthcare cuts could further challenge the sustainability of private doctor practices, as independent physicians grapple with reduced insurance payments and regulatory burdens. In light of this, science-based solutions, finance strategies, and medical business models may become crucial for maintaining the quality of medical care and addressing various medical-conditions.
