Should I stay independent or join a health system?

The decision to remain in independent practice or accept employment with a health system is one of the most consequential a physician can make. It touches compensation, autonomy, work-life balance, patient relationships and long-term career satisfaction. And it is a decision more physicians are facing now than at any point in recent memory, as financial pressures, administrative burdens and a rapidly consolidating health care landscape continue to reshape what it means to run a practice. For some, the pull toward employment is purely practical: the overhead is someone else's problem, the salary is predictable and the malpractice insurance is covered. For others, the prospect of ceding clinical control, referring within a system and answering to non-physician administrators makes employment feel less like relief and more like a trade-off they are not willing to make. There is no universal right answer, but there are a lot of important questions to work through.

How common is physician employment today?

Very common, and the trend has moved sharply in one direction over the past decade. According to AMA survey data, the share of physicians in independent practice fell from 37.8% in 2019 to 22.4% in 2024, with a commensurate rise in physicians employed by hospitals, health systems and other corporate entities. Only 35.4% of physicians had an ownership stake in their practice in 2024, compared with 53.2% in 2012 and roughly 76% in the early 1980s.

That said, the pace of consolidation appears to be slowing, and Physicians Practice has reported that many physicians are reconsidering what ownership really means to them.

What is driving physicians toward employment?

A few major forces: reimbursement pressure, administrative burden and the rising cost of running a practice. After adjusting for inflation, Medicare physician payment has effectively fallen 29% from 2001 to 2024. According to data from Strata Decision Technology, the investment required to support a physician practice rose 8.8% year over year, reaching $332,887 per full-time equivalent physician, while median direct expenses per physician hit $1.1 million annually.

Prior authorization is another consistent complaint. The Medscape Physicians and Prior Authorizations Report 2024 found that 86% of physicians feel the time they spend on prior authorization requests or appealing denials has led to delays in patient care, and 61% said patients frequently abandoned recommended treatments because of those delays.

For many, employment offers relief from those stressors. A Medscape employed physicians survey found that not having the headaches of running a small business was cited as the top perk of being an employed physician, with more than half of respondents listing it as something they like most about their job.

What do physicians give up when they join a health system?

The most frequently cited loss is autonomy. As Physicians Practice has covered, employed physicians are no longer in charge of their own practice, including hiring and firing decisions, schedules, supplies and even medical practice protocols. One of the biggest complaints physicians have after joining large medical systems, as Physicians Practice has noted, is that they lose control over what they believe is the best way to care for patients, with referrals often required to stay within the group or a designated network.

There are financial trade-offs too. While a health system may offer a higher base salary up front, the longer-term picture often favors ownership. According to the Medscape Physician Compensation Report 2024, self-employed doctors out-earned their employed counterparts by 11% in 2023, with an average salary of $391,000 versus $353,000.

Burnout data also cuts against the employment model. The Physicians Foundation 2024 Survey of America's Physicians found that employed physicians report higher levels of burnout at 62%, compared to 53% among physicians working for or owning an independent practice.

What are the real advantages of joining a health system?

They are meaningful, especially early in a career or during uncertain times. Employment typically includes a stable salary, covered malpractice insurance, access to larger support staff and technology infrastructure, and no personal liability for the business. As Physicians Practice has outlined, about 1 in 4 physicians list malpractice coverage as a key advantage of employment, and about 1 in 5 identify a positive work-life balance as a benefit, particularly around reduced call responsibilities.

Health systems also provide infrastructure that can be hard for a small practice to replicate, including EHR systems, coding and billing teams, and HR support. For physicians who simply want to focus on clinical care, that trade-off can be worth it. The AMA outlines the pros and cons of all three paths, including solo practice, group practice and hospital employment.

What should I know before signing an employment agreement?

Read it carefully, and do not assume anything is non-negotiable. As Physicians Practice has covered, hospital deals are constrained by "fair market value" rules and most systems will use an outside consultant to craft the offer. That consultant is paid by the hospital, not you.

Key questions to ask before signing: How will your compensation be determined if the system moves away from a production model? What happens to ancillary revenue you currently generate? Is there a non-compete clause, and how broadly does it restrict you geographically? What do you own, if anything, when you leave? Can you buy back your practice if the arrangement does not work out?

What are the options beyond the binary choice of independent vs. employed?

More than most physicians realize. As one practice management analysis notes, practice owners now have a variety of choices, including joining an accountable care organization or clinically integrated network, hiring a management services organization to handle administrative work, joining with like-minded practices in a physician ownership structure, or selling to an entity that owns and manages practices.

Management services organizations, or MSOs, have grown in popularity as a middle path. An MSO can take on billing, HR, credentialing and other administrative functions while the physician retains clinical and practice ownership. Physicians Practice covered MSOs as an option worth exploring before committing to full employment.

Is independent practice viable long-term?

The evidence suggests it can be, with the right strategy. According to Bain and Company's Frontline of Healthcare Survey, provider satisfaction in physician-led organizations ranges from 70% to 90%, well above the 50% to 75% reported by health-system-led practices. Physicians in physician-led practices also report better access to supplies and equipment (87% vs. 67%) and more effective workflows (78% vs. 58%).

The Physicians Practice panel on independent practice in 2025 identified several strategies helping practices hold their ground: collaborative contracting models, AI-assisted operations, smarter workflow design and renewed interest in autonomy among younger physicians. None of them are quick fixes, but they point toward a path forward for practices willing to adapt.

What does the decision really come down to?

As Physicians Practice has put it: ask yourself what you want from practice today, what your patients need and what your primary concerns actually are. Then weigh the options honestly.

If financial security, reduced administrative burden and a predictable schedule are your priorities, employment may be the right call. If autonomy, long-term earning potential and the ability to shape your practice and patient relationships matter most, staying independent, or finding a model that preserves independence while sharing infrastructure, is worth fighting for. The key is making the decision proactively, before financial pressure forces your hand.