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 six percentage points to 47.1% in 2016 from 53.2% in 2012.

In contrast, the share of patient care physicians with employed positions increased about five percentage points to 47.1% in 2016 from 41.8% in 2012. There were equal shares of physician employees and physician practice owners in 2016, while 5.9% of patient care physicians were independent contractors.

Internal medicine sub-specialties, which included nephrologists, had the third highest rate of physicians as owners, with 51.4% as owners, 46.3% as employees, and 2.1% as independent contractors. The surgical sub-specialties (59.3%) and radiology (56.3%) had the highest share of physician owners, with 59.3 and 56.3%, respectively.

Emergency medicine had the lowest share of owners (27.9%) and the highest share of independent contractors (24.8%). Pediatrics was the specialty with the highest share of employed physicians (58.3%).

The preference of younger physicians toward employed positions has had a prominent impact. Nearly two-thirds (65.1%) of physicians under age 40 were employees in 2016, compared to 51.3% 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.

While the majority of patient care physicians (55.8%) worked in medical practices that were wholly owned by physicians in 2016, this majority decreased from 60.1% in 2012. Although this share is more than four percentage points lower than that of 2012, most of this change occurred between 2012 and 2014.

Physician practice types

In addition to specialty-level differences in whether physicians are owners or employees, there are also differences across specialty in practice type, according to the report.

Psychiatry had the greatest percentage of physicians in solo practice, 31.9% in 2016. Internal medicine sub-specialties, which included nephrologists, had only 13.5% of physicians in solo practice.

In most specialties, between 41 and 51% of physicians worked in single specialty practices; internal medicine sub-specialtieshad 44.1% working in single specialty practices and 27.3% working in multi specialty groups.

Less than 10% of physicians in all specialties except radiology, anesthesiology, emergency medicine and general surgery were directly employed by a hospital, including internal medicine sub-specialties,had 5.4%.

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%.

Most physicians (57.8%) 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% of physicians were working in practices with 50 or more physicians compared to 12.2% in 2012.