Issue Brief on Provider Consolidation and the Impact on Health Care Spending (PDF)

This brief explores the ongoing trend of hospitals, health systems and venture capital firms acquiring physician practices and employing physicians.  In ongoing research collaboration with Avalere Health, PAI has released several studies relating to this trend and the impact that this type of consolidation has on health care spending by payers and patients alike.  Key findings include: 

• Between July 2012 and January 2018, hospital-acquired physician practices increased from 35,700 in 2012 to 80,000. Physician employment grew by more than 70% over that period. 
• There is a significant increase in spending when services are delivered in hospital-owned settings versus the physician office setting.  As physician practices are absorbed by hospitals and other large entities, payments by payers and patients increase.