A group practice is a medical practice where two or more physicians work together under a single business entity, sharing resources like office space, staff, equipment, and billing systems. It’s the most common way doctors practice medicine today. About 65% of physicians in the United States work in either a single-specialty or multi-specialty group, and that number has been climbing steadily as solo practice declines.
How Group Practices Are Structured
At its core, a group practice is one legal organization with centralized decision-making, consolidated billing, and shared finances. It can take many forms: a partnership, professional corporation, limited liability company, nonprofit, or faculty practice plan at a teaching hospital. What ties them together is that the physicians share overhead costs, pool their revenue, and operate as a unified business rather than as independent doctors who happen to share a building.
Federal law sets a specific bar. Under the Stark Law, a group practice must have at least two physician members, and those physicians must deliver at least 75% of their patient care services through the group. Their income and expenses must be distributed according to methods decided before any payments come in, not after the fact. And no physician in the group can be paid based on how many referrals they generate. These rules exist to prevent conflicts of interest, particularly when doctors refer patients to services their own group provides.
Each group practice receives its own National Provider Identifier (a Type 2 NPI), which is the organizational billing number used in insurance claims. Individual physicians within the group still have their own personal NPI (Type 1), but the practice bills under the group’s number and treats the revenue as belonging to the organization.
Single-Specialty vs. Multi-Specialty Groups
A single-specialty group practice is made up of physicians who all practice in the same field, like a cardiology group or an orthopedic surgery group. These practices tend to have simpler financial structures because everyone generates revenue in roughly similar ways, making it easier to divide income fairly.
A multi-specialty group brings together physicians from different fields under one roof. A primary care doctor, a cardiologist, and an endocrinologist might all belong to the same practice. This model lets patients get referrals and follow-up care within the same organization, but it creates more complicated financial dynamics. A surgeon and a family medicine doctor generate very different revenue, so the group has to navigate income disparities when deciding how everyone gets paid.
In 2024, 37% of U.S. physicians worked in single-specialty groups and 28% worked in multi-specialty groups. The trend is moving toward multi-specialty arrangements: that 28% figure is up about six percentage points since 2012, while single-specialty groups have dropped from 42.6% in 2020 to 37.2% in 2024.
How Physicians Get Paid in a Group
Group practices use several compensation models, and the choice affects how physicians within the group behave day to day. The four main approaches are:
- Production-based compensation: Physicians earn more when they see more patients or perform more procedures. This is the most direct link between individual effort and pay.
- Straight salary: Physicians receive a fixed amount regardless of how many patients they see. This provides income stability but offers less financial incentive for higher volume.
- Group-based compensation: Pay is tied to the overall performance of the group rather than individual productivity. This encourages teamwork but can create tension if some physicians feel they’re carrying more of the workload.
- Capitation-based compensation: The group receives a set amount per patient enrolled, regardless of how many services those patients use. This model rewards keeping patients healthy and avoiding unnecessary care.
Most real-world practices blend these approaches, often combining a base salary with productivity bonuses or quality incentives.
What Group Practice Means for Patients
The practical benefit for patients comes down to coordination. When your doctors are part of the same group, they share medical records, communicate about your treatment, and can manage referrals internally. Research published in the Journal of General Internal Medicine found that patients who reported better care coordination also received measurably higher-quality clinical care. Patients at the top of care coordination scores had clinical performance scores at least 5 percentage points higher than those at the bottom across 9 of 13 standard quality measures, including cancer screenings, diabetes management, and cardiovascular care.
The effect was especially strong for certain conditions. For diabetes control, osteoporosis management, and rheumatoid arthritis treatment, the gap between well-coordinated and poorly coordinated care exceeded 10 percentage points. Much of this coordination happens at the physician group level, not just the insurance plan level, meaning the practice you choose genuinely affects how well your care is managed.
Strong health information technology plays a role here too. Groups that invest in integrated electronic health records make it easier for every doctor in the practice to see your full medical history, know what medications you’re taking, and stay informed about any specialist visits you’ve had.
The Shift Away From Solo Practice
Solo practice is steadily shrinking. In 2012, 18.4% of physicians worked alone. By 2024, that figure had dropped to 11.9%. The reasons are largely economic and administrative: running a practice alone means shouldering all the costs of rent, staff, malpractice insurance, billing systems, and regulatory compliance. In a group, those costs are spread across multiple physicians.
Only 42.2% of physicians were in any form of private practice in 2024, meaning practices wholly owned by physicians. The rest work for hospitals, health systems, or other corporate entities. This shift has accelerated partly because of private equity firms acquiring physician groups. Dermatology has been hit particularly hard: dermatologists make up about 1% of U.S. physicians, yet dermatology practices account for 15% of private equity acquisitions. The American Medical Association has raised concerns that these acquisitions can undermine clinical independence, with firms sometimes pressuring doctors to see more patients, perform more procedures, or push products not covered by insurance.
For physicians weighing their options, a group practice sits in the middle ground between full independence and employment by a large health system. You give up some autonomy in exchange for shared resources, financial stability, and the ability to focus more on patient care and less on running a business.