Physician Practices NAICS 621111

        Physician Practices

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Industry Summary

The 197,700 physician practices in the US consist of primary care and specialty practices. Primary care physicians are responsible for monitoring an individual’s overall medical care, performing physical exams, and treating minor illnesses. Primary care practices include general and family practices, internal medicine, pediatrics, and obstetrics/gynecology. Specialty practices focus on a particular area of medical care and may also perform surgeries to treat problems. Specialists include allergists, cardiologists, dermatologists, gastroenterologists, general surgeons, ophthalmologists, orthopedists, psychiatrists, and radiologists.

Lower Reimbursement Rates

Physician practices are highly dependent on reimbursements from private insurance companies, Medicare, and Medicaid.

Adapting to Changing Standards

Practices must ensure their billing software is ready for new billing codes and claim submission requirements, or they face disruptions in their cash flow, aka revenue flow.


Recent Developments

Sep 3, 2025 - Physicians Often Leave After Private Equity Firms Sell Medical Practices
  • Private equity’s (PE) growing presence in health care is driving higher physician turnover and consolidation, according to Harvard Business School researchers. Professor Leemore Dafny and co-researchers found that physicians were likelier to leave their practices after PE investors exited, and those leaving were likelier to join larger practices, creating a ripple effect of talent consolidation and, as prior research shows, higher costs. Private equity firms typically hold medical practices for three to seven years, often consolidating them. Most sales, Dafny notes, are to other private equity firms. The data varies, but past studies have shown that many patients stay with their primary care physicians far longer, even for more than a decade. Those long-standing relationships lead to better care and health outcomes, prior research has found.
  • Hospitals are buying small physician practices and that is driving up the price of care, according to the National Bureau of Economic Research (NBEA). About 42.2% of physicians worked in private practices (a practice that was wholly-owned by physicians) in 2024, down from 60% in 2012, according to the American Medical Association's Physician Practice Benchmark Survey. Health systems see opportunities to achieve more clinical integration and expand referral networks by acquiring independent physician practices. The acquisitions aren't limited to hospitals: Private equity, insurers, and businesses like Amazon are also acquiring medical practices from doctors facing declining reimbursement and high overhead costs.
  • There were 3,943 physician practice management (PPM) transactions in which private equity firms (PE) were involved during the past 10 years, according to Pitchbook. PEs focus on acquiring a sizable practice or a platform investment in the physician practice segment and then use this corporate foundation to expand through add-on acquisitions. The demand from PE remains robust, according to Pitchbook, resulting in a wave of outreach to physician practice owners nationwide.
  • Physician practice employment and average wages for nonsupervisory employees increased slightly during the first six months of 2025, according to the US Bureau of Labor Statistics (BLS). Revenue for physician offices increased 9.3% year over year and 3.9% quarter over quarter in the fourth quarter of 2024, according to the US Census Bureau. The Producer Price Index for physician practices increased 1.76% year over year in July, according to the BLS.

Industry Revenue

Physician Practices


Industry Structure

Industry size & Structure

The typical physician practice has a single location, 22 employees, and about $4.4 million in annual revenue.

    • There are over 197,000 physician practices in the US with about $591 billion in revenue and over 2.9 million employees.
    • There are over 443,500 physicians working in private practices.
    • Over one billion visits are made annually to physician practices.
    • There are two types of physicians - MD (Medical Doctor) and DO (Doctor of Osteopathic Medicine). Both are qualified to perform all types of treatment, including surgery, but DOs emphasize the body's musculoskeletal system, preventive medicine and holistic care.
    • Education and training requirements for physicians include 4 years of undergraduate school, 4 years of medical school, and 3 to 8 years of internship and residency. There are 143 accredited medical schools in the US for MD degrees and 41 accredited schools for DO degrees.
    • To practice medicine in the US, all physicians must pass either the United States Medical Licensing Exam (USMLE) for MDs or the Comprehensive Osteopathic Medical Licensing Exam (COMLEX) for DOs.

                                  Industry Forecast

                                  Industry Forecast
                                  Physician Practices Industry Growth
                                  Source: Vertical IQ and Inforum

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