Last week I told you about all the negative changes in hospital healthcare as a result of physicians leaving private practice and being employed by hospitals. (Hospital Changes Threaten Patient Care). In the 1960s only about 15% of all physicians worked for hospitals. However, in 2026 recent surveys have revealed up to 78% of physicians now work for hospitals.

This radical change has led to loss of continuity in care as private physicians are left out of treatment decisions once patients are admitted to the hospital. It has raised the cost of healthcare and diminished the quality of patient care.

But now there is evidence this trend may be reversing. Daniel Godla, reporting for thoroughcare.net says the pendulum is swinging as more and more physicians regret their decision to work for hospitals and desire to return to private practice.

Godla says a survey conducted by Bain & Co. found that “nearly 25% of physicians in health system-led organizations are contemplating a change in employers, compared to just 14% in physician-led practices.” Among those contemplating a change, 37% are seeking to transition to physician-owned settings.

Godla tells us tells us there are three reasons physicians leave private practice to be employed by hospitals:

Three Reasons Physicians Leave Private Practice

1. Physician Pay and Reimbursement Declined

A recent Medscape survey of more than 7,000 physicians across 29 specialties found that physician pay growth has been the lowest since 2011. More than half felt underpaid or not fairly paid relative to their jobs. Between 2005 and 2021, Medicare reimbursements decreased nearly 2.3%, accounting for inflation. Just last year, the 2025 Physician Fee Schedule saw average payment rates reduced by 2.93%.

2. Malpractice Insurance and Practice Cost Increases

Independent practices have been particularly impacted by reduced revenue and escalating operational costs. This includes:

• Overhead expenses
• Malpractice insurance premiums
• Staffing shortages
• Rising wage demands
• Supply chain disruptions that persist post-COVID

3. Prior Authorizations/Administrative Burdens

A 2022 survey of more than 500 physicians from independent practices found that 89% believed regulatory burdens had increased over the past year. Nearly  82% considered the prior authorization process to be very or extremely burdensome.

But now that the pendulum is swinging back, Godla gives us three reasons physicians are changing their minds:

Three Reasons Physicians Return to Private Practice

• Physicians Seeking Autonomy

A survey from NORC at the University of Chicago found that 61% of employed physicians have moderate or no autonomy to make referrals outside of their ownership system. Nearly 47% said they adjust patient treatment options to reduce costs in line with employer policies or incentives. This lack of independence is an essential aspect of the “practice of medicine.” Physicians may miss the flexibility to explore new treatment options, participate in research, and implement innovative care models.

• Physicians Seeking Adequate Pay and Profit-sharing

In Medscape’s survey, 43% of physicians reported a drop in income—despite the overall average increase—coinciding with a 2.93% cut to the CMS Physician Fee Schedule for 2025. Additionally, 62% of those surveyed believed that most physicians are underpaid today. Some physicians transition to corporate-led employment because of increases in base pay. However, while hospitals and systems may provide a level of stability, they do not offer the same long-term financial advantages as ownership or leadership in an independent practice.

• Physicians Seeking More Balance and Time Focused on Direct Patient Care

According to the Physicians Foundation, employed physicians report more inappropriate feelings of anger, fearfulness, or anxiety than independent physicians. They also convey higher levels of burnout (62%) compared to physicians working for or owning an independent practice (53%).Other research published in the Journal of the American Board of Family Medicine found that physician burnout within independent practices was only 13.5%, which is lower than for employed physicians.

All of this comes as no surprise to me. Physicians don’t like to be told how to take care of their patients by hospital employers. Hopefully, this will lead to more personal patient care, less unnecessary treatment, and overall reduced healthcare spending.

 

 

As I look back over the last 60 years, I am seeing changes in how hospitals deliver patient care and I don’t like what I see. I was first exposed to hospital care in 1966 when I worked as an orderly in the summer in a hospital operating room. Since then, I have worked as a surgical assistant, medical school student, orthopedic resident, and orthopedic surgeon for the last 42 years.

According to the American Medical Association (AMA), in the 1960s 15% of doctors were employed by hospitals. In 2026 that number is 78% in some surveys. That represents a seismic change in the healthcare system.

How does this change impact hospitals?

Hospitals are hiring doctors for a simple reason – to make more money! The third-party payers, healthcare insurers, allow higher charges for the same services if they are performed in a hospital – or billed by a hospital. That means when doctors are employees of a hospital, all of their charges for services are billed at higher rates. This is a huge incentive for hospitals to employee doctors.

There’s another reason, too. When hospitals employ doctors, they control how they practice medicine. They incentivize the doctors to do more procedures and order more tests that make more money for the hospitals. They monitor the number of patients their doctors see in an average day and they are held accountable if they don’t meet target goals.

Recently I have been exposed to how all this has impacted patient care when my wife was hospitalized. I observed changes in the practice of medicine in the hospital that radically differed from my patient hospital experiences as a physician.

When I was practicing orthopedic surgery, I would admit a patient and frequently consult their primary care physician (PCP) if they had concurrent medical conditions that needed to be treated. The PCP would come from their office to see the patient, make recommendations for their care, and continue to follow the patient in the hospital if necessary. The patient received continuity of care from the physicians who treated him before admission to the hospital.

Today, that has all changed. When you are admitted to the hospital you will be treated by physicians who don’t know you. You will be admitted to the hospital by an internal medicine doctor, known as a “hospitalist” because their entire practice is based in the hospital and they are employees of the hospital. Your PCP will not be consulted. If you need other specialists to see you, they will also be hospital-based employees.

These hospital-based employees will be governed by hospital “protocols” that dictate how they practice. For instance, they will order blood work on every patient, every day, as long as they are in the hospital! The only good reason for such “protocols” is to make more money. My wife entered the hospital with a normal hemoglobin and left anemic! Furthermore, they will order additional consultations with other hospital-based specialists whenever these consultations can be remotely justified. Just another way to crank up the hospital charges.

All of this may not seem harmful to the patient because they are getting lots of attention from a plethora of medical providers. But when physicians who are not familiar with the patient take over care from those physicians who do knowthe patient, errors in patient management can and do occur.

Be an advocate for your family

My advice is that every family must have a patient advocate; preferably someone with medical expertise but at least someone willing to ask questions and make the doctors and nurses justify everything they are doing. I saved my wife from several needless tests and procedures and you can do the same for your family member just by paying attention.