A physician group is a medical practice where two or more doctors join together under a single legal entity to provide patient care. Rather than each doctor running an independent office with separate staff, billing, and equipment, they share those resources and operate as one organization. Physician groups range from a small two-doctor family medicine office to massive organizations employing hundreds of specialists across multiple locations.
How Physician Groups Are Structured
Under federal regulations, a physician group must operate as a single legal entity. That entity can take several forms depending on state law: a partnership, professional corporation, limited liability company, nonprofit corporation, or faculty practice plan at a teaching hospital. The specific legal structure affects how profits are distributed, how liability is shared, and how decisions get made, but from a patient’s perspective, the day-to-day experience looks similar regardless of which form the group uses.
The two broad categories are single-specialty and multi-specialty groups. A single-specialty group is made up of doctors who all practice in the same field, like a group of five cardiologists sharing one practice. A multi-specialty group brings together doctors from different specialties under one roof, so you might see a primary care physician, a dermatologist, and an endocrinologist all within the same organization. Multi-specialty groups can offer patients the convenience of referrals and care coordination within one system.
Who Owns Them
Ownership is where physician groups get more complicated than they used to be. Traditionally, the doctors themselves owned the practice as partners or shareholders. That model still exists, but it’s shrinking. According to AMA data from 2024, only 42.2% of physicians were in wholly physician-owned private practices. Meanwhile, 34.5% worked in practices owned by a hospital or health system, and another 12.2% were directly employed by or contracted with a hospital.
Private equity firms have also entered the picture. About 5.5% of physicians in one national survey reported working for a practice that had been acquired by a private equity firm, and roughly 10% said private equity had expressed interest in purchasing their practice. Physicians themselves are skeptical of this trend: 52% viewed private equity ownership as worse than independent ownership, and nearly half saw it as worse than being owned by a nonprofit hospital system.
Despite the growth of hospital employment, private practices still account for the majority of where physicians physically work. As of 2022, 55% of physicians worked in physician offices and 27% in hospitals, though the office share has drifted down about 3 percentage points over the past decade.
Why Doctors Join Groups
Running a medical practice solo means handling billing, insurance contracts, hiring, IT systems, regulatory compliance, malpractice coverage, and facility costs on your own. A physician group spreads those responsibilities across the organization. A group can hire dedicated administrators, invest in better electronic health record systems, and negotiate stronger rates with insurance companies because it represents more patients and more leverage.
Compliance is another major factor. Federal fraud and abuse laws require physician practices to monitor billing accuracy, train staff on proper coding, and maintain documented policies for handling violations. The Office of Inspector General recommends that every physician practice establish a formal compliance program with internal auditing, a designated compliance officer, employee training, and disciplinary guidelines. For a solo doctor, building and maintaining that infrastructure is a significant burden. In a group, those costs and responsibilities are centralized.
There’s also a lifestyle element. Physicians in a group can cover for each other during vacations, illness, or parental leave. Call schedules can rotate among several doctors instead of falling on one person every night. For newer physicians carrying substantial student debt, joining a group as a salaried employee (roughly 70% of physicians in one survey were salaried) removes the financial risk of launching an independent practice.
What This Means for Patients
From a patient’s standpoint, physician groups can offer real practical benefits. When multiple doctors share the same electronic health record system, each provider on your care team can see the same test results, prescriptions, and treatment history. That coordination helps prevent duplicate tests, reduces the chance of drug interactions, and saves you from filling out the same paperwork at every visit. In a multi-specialty group, getting a referral to a specialist within the same organization often means shorter wait times and smoother information sharing.
The tradeoff is that larger groups and hospital-owned practices tend to charge more. A Yale study found that when hospitals acquire private physician practices, prices rise substantially without any measurable improvement in quality. Analyzing childbirth costs specifically, researchers found that two years after a hospital acquired an OB-GYN practice, the physicians’ prices for labor and delivery rose by an average of $502, a 15.1% increase. Hospital facility fees for those same services climbed by $475, or 3.3%. The price increases were largest when the acquired doctors had previously practiced at competing hospitals, suggesting the driver was reduced competition rather than better care.
Even physicians who were already part of a hospital system saw their prices go up by 9% after their hospital acquired additional doctors in the same specialty. Fewer independent competitors in a market gives the remaining groups more pricing power.
Size and Scale Vary Widely
There is no single definition of “small” or “large” when it comes to physician groups. A two-person partnership in a rural area qualifies just as much as a multi-state organization with thousands of employed doctors. In practice, groups tend to cluster at extremes: many physicians still work in practices with fewer than 10 doctors, while a growing share belong to organizations with 50 or more. The mid-sized group of 11 to 49 doctors is less common.
Large physician groups often function like miniature health systems, operating their own urgent care clinics, outpatient surgery centers, imaging facilities, and laboratory services. Some contract with hospitals to provide all physician staffing for emergency departments or hospitalist programs. At that scale, the group negotiates insurance contracts, sets clinical protocols, and manages quality metrics in ways that look more like a corporate operation than a traditional doctor’s office. For the patient walking in the door, though, the visit itself feels much the same. The biggest differences show up on the bill and in how smoothly information flows between your providers.