According to a 2024 report from the Physicians Advocacy Institute (PAI) and Avalere Health, over 77% of physicians are employees of hospitals, health systems, or other corporate entities. This figure includes those physicians working in practices purchased by health systems or other corporate entities. While physician-owned practices still exist, they are in the minority. That said, physicians in the job market still have many options available, and it’s important to understand the pros and cons of each.
Each path presents unique opportunities and challenges, and physicians must carefully consider how they align with individual career goals and personal preferences. As the Regional Vice President of Recruitment for Jackson Physician Search’s Midwest Division, I work with candidates seeking roles in both settings. Some applicants clearly prefer a private practice or a hospital system, while others remain open to exploring both possibilities. Through thoughtful discussion, it often becomes evident which environment better suits their aspirations and lifestyle.
Whether I’m advising a resident searching for their first position or an experienced physician considering a transition, I take the time to conduct in-depth conversations to identify the most suitable work setting. Part of that process, if needed, is an overview of the pros and cons of both.
Pros and Cons of Private Practice
Private Practice Pro: Greater Autonomy
One of the most appealing aspects of private practice is the level of autonomy it offers. Physicians in private practice generally have more input over the practice’s day-to-day operations and how clinical decisions are made. Partners in the practice will vote on decisions impacting the group without oversight from corporate administrators. This freedom allows physicians to prioritize patient care and run the practice the way they believe is best.
Private Practice Pro: Greater Long-Term Earning Potential
While the starting salary in private practice may not be as high as that offered by hospitals or health systems, private practitioners often experience higher earning potential over the long term as there is no limit on earning potential. The practice may also invest in real estate or medical equipment to diversify revenue streams, allowing partners to reap even greater financial rewards. As the practice grows, the value of each partner’s stake as an asset increases.
Private Practice Pro: Ability to Chart Your Path
Private practice provides the opportunity for personal and professional growth in a way that hospital employment may not. You can choose the sub-specialties, treatments, and innovations you wish to explore, develop unique patient care models, and tailor your practice to match your values. Many physicians in private practice find great satisfaction in shaping their practice around their unique vision rather than a hospital’s policies or guidelines.
Private Practice Con: Lower Starting Compensation
One significant drawback of private practice is the lower starting compensation compared to hospital employment. While private practice physicians have more significant long-term earning potential, the early years can be financially challenging. While building a patient base and pursuing the partnership track, income may be modest compared to that offered by a hospital or health system. This initial financial strain can be difficult for some physicians, particularly those with student loan debt or family obligations.
Private Practice Con: Greater Financial and Professional Risk
Running a private practice carries inherent risks. Partners are responsible for patient care and the business’s financial health. This means managing cash flow, dealing with insurance reimbursements, navigating healthcare regulations, and handling marketing and staffing. If the practice encounters financial trouble or unexpected challenges (such as a downturn in patient volume or changes in reimbursement rates), partners bear the full brunt of those risks.
Private Practice Con: Limited Visa Sponsorship and Loan Repayment Options
Private practice can be a less viable option for international physicians due to their inability to sponsor work visas. Most private practices lack the infrastructure required to navigate visa sponsorship processes, making it more difficult to find work opportunities in this setting. Additionally, private practices rarely qualify for federal loan repayment programs, which can be a significant disadvantage for physicians with student debt. These factors limit the accessibility of private practice for certain physicians, especially those early in their careers or from abroad.
Pros and Cons of Hospital Employment
Employment Pro: Larger Starting Salary and Financial Security
Hospital employment often offers a higher starting salary and more predictable income than private practice. Hospitals typically offer salary guarantees, signing bonuses, and comprehensive benefits packages, which can especially appeal to new physicians seeking financial stability. The hospital setting removes the economic pressures of running a practice, such as billing, staffing, and office overhead, allowing physicians to focus on patient care.
Employment Pro: Easier to Establish a Patient Base
Joining a hospital or health system can also make it easier to establish a patient base. With a built-in network of referrals from other hospital physicians and specialists, physicians have a steady stream of patients from the start. The hospital’s reputation and marketing also contribute to patient flow, reducing the responsibility of patient acquisition that private practitioners have. This can be especially beneficial for specialists or physicians who are just starting out and want to avoid the challenges of building a practice from the ground up.
Employment Pro: Network of Doctors and Referral System
Physicians benefit from an extensive network of other healthcare professionals who can refer patients or collaborate on complex cases in a hospital setting. This interdisciplinary approach to patient care fosters a sense of teamwork and provides support, which can be invaluable for both clinical outcomes and professional development.
Employment Con: Limited Autonomy and Control
While hospital employment provides a stable income, it also comes with the downside of limited autonomy. Hospital physicians typically have less control over their daily schedule, treatment protocols, and practice structure. Administrators often make decisions about staffing, patient flow, and operational policies, leaving little room for individual input or flexibility. This can be frustrating for physicians who prefer to make decisions independently or want a greater say in how the practice is run.
Employment Con: Less Voice in Organizational Direction
Employed physicians have little to no influence over the organization’s strategic direction. Executives typically make decisions about the mission, services offered, and budget allocations with limited input from physicians. This lack of involvement can be a significant downside for those who enjoy being part of the decision-making process or wish to shape the direction of healthcare delivery.
Employment Con: Referral Restrictions
Hospitals and health systems often have specific guidelines about patient referrals, potentially limiting physicians’ ability to refer patients to specialists they know and trust. This lack of control can be frustrating for physicians who want to prioritize patient care based on their own professional judgment rather than organizational directives.
Which Path is Right for You?
The choice between private practice and hospital employment ultimately depends on what you value most in your medical career. If autonomy, long-term financial growth, and the ability to shape your practice are important, private practice may be the right fit. However, hospital employment might be a better option if you prefer more financial security, easier access to patients, and less administrative responsibility.
Whether I’m working with a resident looking for his or her first physician job or a physician considering a job change from one setting to another, I always ask a series of questions to discover which setting best suits their current and future needs. My questions include:
- Are you business-minded? Do you see yourself as an entrepreneur?
- What are your immediate compensation needs? How vital is loan repayment?
- What kind of work-life balance do you want?
- How important is physician autonomy?
How physicians answer these questions can help me make an informed recommendation, but ultimately, it is up to them to determine which practice type will be the best fit. Understanding the pros and cons of each path is essential to making an informed decision that aligns with the physician’s career goals, lifestyle, and values.
Whether you know your preferred practice setting or are exploring your options, the recruitment team at Jackson Physician Search is eager to assist. We have clients of all types and sizes in every region of the country looking for physicians like you. Reach out today to learn more, or search for physician jobs online now.
About Tara Osseck
With more than 15 years of experience in the healthcare industry, Regional Vice President of Recruiting Tara Osseck specializes in matching healthcare organizations with physicians who are a strong fit for the role and the culture. Her healthcare career began as a physician liaison. It quickly expanded to include physician recruitment, strategic planning, and business development, working for various hospitals throughout Memphis, Tennessee, and St. Louis, Missouri. Based in St. Louis, Osseck leads the firm’s Midwest Division, placing providers across the Midwest and Upper Midwest. She earned a bachelor’s degree from Truman State University and a master’s in health care administration and management from The University of Memphis.
