The number of self-employed physicians has been declining for years — but why, and at what cost?
Fact checked by Derick Wilder
Farah Khan, MD, has been a private-practice physician for 19 years. At 52, she says most young doctors aren’t interested in running their own practice. By contrast, working in a hospital means regular shifts, fewer hours, and better benefits and compensation. But, Khan says, “Private practices allow us to spend more time with our patients versus employed physicians, who have to follow a set schedule.” She adds, “The art of medicine is dying.”
Khan opened her downtown Chicago practice, Millennium Park Medical Associates, in 2005. She saw a significant need for a female internist, but even more so, she saw that people wanted a doctor they could relate to. Colleagues told her she was crazy for going into private practice, she recalls, but she did it anyway.
On the first day, Khan had to go to Walgreens to get pens and charts. Then she waited for patients to come. A year and a half later, she had so many patients she needed more rooms.
An analysis by the American Medical Association (AMA)shows that between 2012 and 2022, the number of physicians working in private practices steadily declined, from 60.1% to 46.7%. The shift away from independent practices corresponds with the levels of fiscal uncertainty and economic stress that many physicians face.
“In bigger cities like Chicago, there is more momentum than in rural areas for consolidation of physicians into bigger groups,” says Tom Lee, MD, editor-in-chief of NEJM Catalyst. “Then there’s consolidation of those groups into other organizations, like hospital-based systems or systems owned by insurance companies or other corporate entities.”
Marianne Green, MD, a general internist and vice dean for education at Northwestern’s Feinberg School of Medicine, says doctors join large healthcare organizations because payment systems have become more complex, and larger systems can negotiate more effectively for higher payment rates. Consolidation in healthcare could allow more efficient operations for providers but also reduce market competition, discouraging providers from investing in quality care and lower prices, according to health policy group KFF.
The corporatization of healthcare combined with the problems of modern medicine — from an aging patient population to the complexity of disease to new treatments — drives physicians to do more with their patients in less time, Green says.
Now, Khan has thousands of patients, with her referrals coming primarily from family and friends of her existing patients. She knows them well. Her reputation as a caring physician who advocates for her patients is a strong selling point.
Private practice is a side of medicine that physicians-in-training don’t often get to see, Khan says. As a result, they miss out on an accurate portrayal of primary care. Instead, the clinics where many medical students train are frequently stressful and under-resourced. She says the medical students and residents she has talked with have no idea what being an internist is really like.
According to Lee, physicians entering the workforce today tend to want flexibility and an organized work environment. He says the quality of care differs between individual physicians and medical groups in that individual doctors can be responsible for the reliability with which they perform processes while larger groups can take responsibility for broader outcomes and efficiency.
One undeniable factor influencing physicians’ decisions on whether to go private: payment reimbursement. “There is a movement toward payment models in which at least some of the compensation is based upon something other than fee-for-service,” Lee says. “Trying to improve quality of care as reflected in patients’ outcomes or improve efficiency is not something you can do on your own. You need to be part of a truly integrated group.”
An additional 2021 study from the AMA, which interviewed private physicians across the U.S., showed that to run a successful private practice, doctors must provide high-quality healthcare while also operating a successful business. This analysis placed additional emphasis on the excellence of individual physicians.
As an alternative to private practice, Green says some primary care doctors have pursued concierge medicine — a practice where a patient pays an annual flat fee, whether they see the doctor or not, for unlimited access to a physician. Though the concierge model allows doctors to have more time with their patients, it creates more healthcare inequities, Green says.
“Some of them will still charge insurance after that for tests and other things; some won’t. There are many different models,” Green says. “Let’s say you have 300 patients, and each one is paying $1,000 a year. While on the low end for an annual fee, that’s still $300,000 as your income.”
At her own practice, Khan can be flexible, setting her hours and devoting more time to her patients without the pressure of larger system expectations. When possible, she reaches out to comfort patients before and after procedures. She says people can tell when doctors don’t care, or don’t have the time to provide quality care.
Despite the decline of private practices, Khan says she never feels threatened. She has declined multiple buy-out offers. And she says she doesn’t think about the competition from big medical groups because being good at her job and truly caring about her patients will ensure her success.
“If I listened to those who told me not to open my own practice, that it wouldn’t survive, then I would not be here,” she says. “If you love what you do for a living, then it is as if you never worked a day in your life. I am blessed to be able to take care of my patients the way I do.”
Originally published in the Fall 2024/Winter 2025 print issue.
Ezra Maille is a freelance reporter currently wrapping up a master’s degree in journalism from Northwestern’s Medill School. He is passionate about environmental justice, something that drew him to studying social justice and solutions journalism at Medill and approach stories through a solutions-oriented lens.
