Physician Entrepreneurship: Evidence from Massachusetts

Abstract

Although there has recently been both signs of a growing interest in entrepreneurship among physicians as well as claims of a paucity of entrepreneurial activity in healthcare more generally, there has been little systematic evidence to inform the extant, type, and drivers of entrepreneurship by physicians. Physician involvement in entrepreneurship is thought to result in more innovative and financially successful healthcare companies. I matched the universe of physicians holding a Massachusetts medical license in 2017 with the Massachusetts new business registration records 1960-2017 to identify those companies founded by physicians. While 19.2% of the 33,770 physicians holding a Massachusetts license in 2017 had founded at least one new business, 33.9% of physicians who graduated from medical school in 1974-1978 had founded a business. A total of 9,501 companies were founded, of which 66.0% are clinical practice, real estate or practice management companies; 7.4% of companies are in the public interest including advocacy, public health, and philanthropy; 5.6% are biotechnology, healthcare information technology or medical device companies; and 18.5% are other business pursuits. For physician entrepreneurs, the mean time from medical school graduation to company founding is 20.2 years. Regression analysis demonstrates gender, medical school attended, and specialty are related to both the rate and type of entrepreneurship. Taken together, these findings suggest physicians are robustly involved in entrepreneurship, although there is evidence of substantial disparities by gender.