Solo medical practices 

Between 1983 and 2014, the percentage of physicians practicing alone fell from 41 percent to 17 percent.

Over the same period, the percentage of physicians in practices with 25 or more doctors grew fourfold (5% to 20%).

Despite these changes, small practices remain common.

Four of 10 physicians are in practices with fewer than five physicians, especially common in rural areas where lower demand can make larger practices less viable.

The solo and small practices decline impetus

The shift from small to large practices reflects a “cohort effect”—younger doctors are 2.5 times less likely than older doctors to be in solo practice, and retiring solo practitioners are not replaced.

Younger physicians prefer larger practices for the work-live balance and income predictability. 

Younger physicians shy away from the entrepreneurial and business demands of a solo practice.

Worse, there is a general trend away from small practices among physicians of all ages.

Market dynamics partly drive this development.

To better compete with other local providers and strengthen negotiating positions with insurers practices feel the pressure to consolidate as they directly compete with hospital systems. 

The public and private actions creating administrative burdens play an increasing role in the decline of small practices.

Employers, insurers, and the government require levels of transparency about cost and quality.

This makes it difficult for small groups and solo practitioners to manage due to lack of infrastructure to collect, manage, and report data in the digitized health information era.

Care coordination requires a higher level of organization and new personnel, both unaffordable to small practices.

As patients and insurers demand seamless, integrated care, larger practices emerge to satisfy.

How do small practices transition to the new paradigm in the health care system?

Several strategies are available to both policymakers and private stakeholders, including:

• Encouraging physician networks (e.g., independent practice associations) enabling resource sharing.
• Providing technical support to solo and small practices.
• Developing payment models that include upfront grants or loans for practices to invest in necessary infrastructure.
• Improving health information technology to reduce the burdens on solo practice.