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
- 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%.
- 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
- 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.
