What is the Future of Private Practice?

Posted by: Ashley Choate
Private healthcare practices—small offices not operating under the umbrella of a larger company or hospital—have become almost rare in the last few decades. According to one source, the total percentage of physicians operating in solo private practices has fallen from 41 percent in 1983 to only 17 percent in 2014.
The reasons behind this shift are myriad, and the question remains: Is this change good or bad?


Over the last decade, adjustments to healthcare legislation, as well as new legislation, have ushered in changes to the overall landscape of the industry. The trend from private healthcare practices to larger practices is just one of the unanticipated outcomes.

Bills such as the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009 require practices to invest in new technologies and take on a heavier administrative burden related to maintaining electronic health records (EHRs). The costs and challenges of implementing these changes have forced many private healthcare practices to merge with larger companies in order to meet the requirements.

Other laws, like the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), have pushed practices to increase price transparency and improve cost and quality reporting. Tracking that data and submitting reports is a significant undertaking—one that many small practices and solo physicians struggle to meet.

Also influencing the shift away from private healthcare practices is the mentality of younger physicians. According to a recent article in the Huffington Post, “younger doctors are 2.5 times less likely than older doctors to be in solo practice.” While 60 percent of doctors still work in practices owned wholly by physicians, a total of 23 percent work in practices at least partially owned by a hospital or hospital system, with the rest working either directly for hospitals, for not-for-profit foundations, or as independent contractors.

Studies indicate that the younger generation of physicians tend to desire a greater sense of control over their lifestyles, and solo practices simply do not offer that option. Running a small business, no matter the industry, is a considerable responsibility, making larger practices or hospitals the logical choice.

Strategies to Preserve Private Practice

Unfortunately, while the trend towards larger practices has had some positive impact on the adoption of new technology and the consolidation of quality care strategies in some areas, there is evidence to indicate that the loss of smaller, solo practice options may not be in the best interests of all patients.

According to a recent study, patients who receive care from solo and small practice physicians experience a lower rate of preventable re-admissions than those treated by physicians at larger practices. Additionally, these patients reportedly build stronger personal relationships in the more intimate setting provided by the small practice environment.

Even so, private healthcare practices may need to consider some creative strategies to stay afloat during all the changes in the industry, such as:
• Improving internal infrastructure. The right infrastructure can help improve a practice’s efficiency, cost effectiveness, and ability to provide quality care for patients.

• Joining an independent practice association or other independent care network. In this way, small practices can work together to share resources, exchange wisdom, and meet federal reporting requirements.

• Researching and adopting new technologies. Along with a good infrastructure (policies, training, and people), the technology to efficiently support that system can have a major impact on outcomes and bottom lines.

In some cases, development grants or loans might be necessary to jump start internal technology and infrastructure goals, but targeting those areas for development can result in solutions that will sustain small or solo private healthcare practices over the long-term.

Ultimately, the healthcare industry is constantly evolving. While many practices have had to adapt by merging with larger companies in recent years, patient preferences and the benefits of a more intimate care environment are not going away—and where a demand or need exists, the opportunity for growth and success exists as well.