WASHINGTON, DC — A pair of new studies from the Physicians Advocacy Institute (PAI) and the American Medical Association underscore the severity of a significant decline in independent and private practice healthcare providers.

The AMA study shows that providers are increasingly abandoning private practice in favor of employment with hospital systems. The new data shows another 4.5% drop in private practice from 2022 to 2024, a cumulative 18% decrease in private practice since 2012, and a corresponding increase in hospital owned practices and direct hospital employee / contractor models of 18%. Doctors cite inadequate reimbursement rates, high operational expenses, and excessive bureaucratic demands as the primary factors driving them away from solo and small group practices.

According to the PAI study, rural areas lost nearly 2,500 physicians and had access to 11% fewer medical practices overall during the 2019 – 2024 study period. In addition, the number of independent physicians fell a shocking 43%. An earlier PAI data set showed that the percentage of physicians employed by hospitals or health systems has grown from 25.8% in 2012 to 52.1% in 2022.

These studies also shed new light on expanding specialty deserts and a 2025 analysis, published in the Journal of the American Medical Association, which found that 44% of rural Medicare patients must travel an hour or more to access surgical care. Of note, the study points out that, “the percentage of rural patients traveling more than 60 minutes to obtain surgical care significantly increased between 2010 and 2020 for both low- and high-risk operations. Additionally, increases in median travel time for rural patients outpaced changes for nonrural patients. These findings suggest a persistent and growing disparity in travel for rural patients undergoing surgical procedures.”

Independent, office-based proceduralists are noting a clear correlation between ongoing Medicare Physician Fee Schedule (PFS) cuts and growing specialty deserts, particularly in rural areas.

“There are procedures we are unable to perform in our office because of the ongoing Medicare Physician Fee Schedule cuts to practice expenses. This is forcing patients to go to the hospitals for the procedures where the wait times are longer and the cost to healthcare is greater,” said Dr. Michael Chill.

Dr. Patrick Ryan said, “The cuts to practice expenses under the Medicare Physician Fee Schedule have affected all aspects of my practice. My lease is ending in two years and I won't be able to afford the new leases that are quoted to me. I can't afford to buy capital equipment like ultrasounds, and I haven't been able to give the raises that my employees deserve.”

The Way Forward: OBFA is asking regulators to roll back the 2022 PFS clinical labor cuts and for Congress to enact policies to provide permanent stability to office-based proceduralists by removing high-cost supplies and equipment from the PFS.

As a result of ongoing cuts to PFS practice expenses, CMS data show that for at least 300 office-based services under the PFS, reimbursement no longer covers even the direct costs (e.g. supplies and equipment) for such services. Since 2006, specialties such as Urology, Cardiology, Radiation Oncology, Vascular Surgery, Interventional Radiology, and Diagnostic Radiology have been cut by -8%, -18%, -21%, -29%, -35%, and -39% respectively. Relating to these cuts, OBFA notes a June 2025 AMA HOD resolution “that our AMA work with the federal government to address flaws in the Medicare Physician Fee Schedule practice expense methodology resulting in reimbursement being less than direct costs for hundreds of services in the office-based setting.”