Supporting and Promoting High-Performing Physician-Owned Private Practices: Voices from the Front Lines

Physician-owned private practices, once the norm in the United States, are becoming less common. American Medical Association (AMA) survey data from 2020 confirmed a persistent downward trend in the percentage of physicians working in physician-owned practices, although it remains high at 49.1 percent, confirming the importance to the U.S. health system of this model of care and suggesting that extinction of this model would be highly disruptive (Kane 2021). The remaining private practices face immense administrative, financial, and clinical challenges in a predominantly fee-for-service environment.

A large body of research demonstrates that independently owned physician practices represent a distinct health care delivery model with specific advantages and disadvantages (Cuellar 2018). For example, evidence suggests that, compared with hospital-owned practices, physician-owned practices might be slower to adopt innovations such as health information technology (Rittenhouse et al. 2017) and care management processes (Rittenhouse et al. 2011). Yet total spending and quality measures—such as preventable hospital admissions, readmissions, and emergency department visits—for physician-owned practices are equivalent to or better than other models of practice (Burns et al. 2018; Casalino 2014; Casalino et al. 2018; Goldsmith et al. 2015; McWilliams et al. 2013; Pesko et al. 2018; Post et al. 2017; Whaley et al. 2021; Young et al. 2021).

In this report, we describe findings from a qualitative study Mathematica conducted with the AMA to define, analyze, and assess the factors that create and sustain high-performing, physician-owned private practices. First, we describe our sampling strategy, recruitment, and interview approaches. Then, we describe our findings, which include (1) the nature of high-performing practices, (2) the advantages of private practice, (3) the threats and challenges associated with private practice, and (4) an overview of the changes physicians see coming to their practices in the future. We conclude with implications for research, training, policy, and practice.