What Does Increased Physician Employment Mean for Medical Billing Companies?

According to research done by the AMA, “for the first time, fewer physicians are owners than employees.” In 2018, the percentage of physician owners dropped below the percentage of physicians who are employees. According to the AMA, the primary shift has come from solo practitioners who are joining larger groups or simply retiring. This can be clearly seen in the data that indicates nearly 90% of owners are over the age of 40. Younger providers are choosing to join established practices rather than striking out on their own. Practice sizes are changing as well, as the balance shifts from smaller groups and individual providers to 43.5% of practices employing 10 or more physicians. However, a majority of physicians still work in practices with 10 or fewer physicians.

Physician Employment is Not a New Trend

Falling rates for physicians in private practice is not a new phenomenon. It is a trend that began in the 1980s, when rates of physician ownership were over 70%. Over the last 35 years, the AMA has tracked physician employment status and shows that while rates fell through the 80s and 90s, they plateaued during the early 2000s. Over the last 6 years the rates have begun to drop again, but this is not universal across specialties.

Variation Among Specialties

The good news for medical billing companies is that depending upon the specialty, rates of independent ownership remain high. “More than half of physicians in four specialty groups were owners in 2018: surgical subspecialties 64.5%, obstetrics/gynecology 53.8%, internal medicine subspecialties 51.7%, and radiology 50.7%,” states the AMA. This dovetails with the fact that, “in 2018, 38.5% of physicians in single specialty groups worked in practices with five or fewer physicians and 7.5% in practices of at least 50.”

For billing companies this means that single specialty groups are the safest bet when it comes to long term trends in the market. They are more likely to be physician owned, and less likely to have in house billing operations due to size constraints.

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