How does physician ownership differ across small, hospital-owned and private equity-owned practices?

Small private practices are more often wholly physician-owned and tend to have fewer doctors. Hospital-owned and private equity-owned practices are less often small, while some allergy practices have partnered with investors and kept physician ownership. Ownership can also affect access to resources and physicians' role in practice decisions.

Small practices are often physician owned

The American Medical Association's 2024 report found that 42.2% of physicians worked in wholly physician-owned private practices, 18 percentage points fewer than in 2012. Almost half of private practice physicians were in practices with five or fewer physicians. The comparable shares were 16.1% in hospital-owned practices and 12.9% in private equity-owned practices.

Private practices also tended to be organized around a narrower specialty. In the AMA report, 78% of physicians in private practice described their practice as solo or single specialty, compared with 31.3% of physicians in hospital-owned practices. These figures describe where physicians work and how they characterize their practices.

Outside ownership can fund growth and shared operations

A hospital or investor may give a practice access to resources that are harder for a small physician-owned group to obtain alone. The AMA says physicians cite three reasons for moving away from private practice: better payer rate negotiations, access to costly resources, and help managing payer regulations and administrative requirements.

Birmingham Medical News reported that the physician owners of Alabama Allergy & Asthma Center and its research center partnered with an investment group and received growth capital to help create AllerVie Health. The physicians retained a meaningful ownership portion and continued practicing at the group's ten locations.

Ownership can shape physicians' role in decisions

Ownership matters to physicians who want to guide clinical changes as well as business decisions. In a podcast interview, Hoyt said many practices new allergists join are owned by a health system or private equity, and that it can be very difficult for a physician in that situation to take the lead in adopting approaches from the literature.

Private practices also face pressure from rising costs. The AMA report says stagnant payment rates amid rising private practice costs have contributed to the erosion of small physician-owned practices. A practice joining a larger organization may gain support for expansion, while physicians may need to clarify how clinical leadership and ownership work after the deal.

Physicians may keep equity after a partnership

A separate account from Harvey & Company says the founders of Texan Allergy & Sinus retained ownership when a private investment firm completed a recapitalization of the allergy management services company. The company provides management support services to affiliated allergy and sinus practices.

For owners weighing a partnership, a concrete first step is to ask how physician ownership, clinical leadership and shared services would be allocated, then compare those terms with the practice's current arrangements. The Texan example shows that a private investment transaction can leave founders with ownership, while the specific agreement sets the terms.

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