PAI Research

Physicians Advocacy Institute

Physician Employment Trends

PAI-Avalere Health Report on Trends in Physician Employment and Acquisitions of Medical Practices in 2019-2020

Only 30 percent of physicians in the United States practiced medicine independently at the beginning of 2021.  

70% of U.S. physicians are employed by hospital systems or other corporate entities such as private equity firms and health insurers.

These staggering facts are key findings in a study released by PAI and conducted by Avalere Health showing that hospital systems and other corporate entities continued to drive consolidation in healthcare by aggressively acquiring physician practices throughout 2019 and 2020, especially during the last half of 2020 at the height of the COVID-19 pandemic.  

Other findings include:

  • Hospitals and corporate entities, including venture capital and private equity firms and insurance companies, now own nearly half of U.S. physician practices.
  • The sharpest increase in acquisitions and employment during 2019 and 2020 was by corporate entities such as private equity firms and health insurers (32%).
  • The COVID-19 pandemic accelerated corporate ownership of physician practices and physician employment by hospital systems and other corporate entities in the last half of 2020.
  • There is a steady trend toward increased employment and hospital ownership of practices in every region of the nation, with some differences in the types of acquisitions driving regional consolidation.

Download the Full Report, and Key Findings, and Press Release and PAI Letter to Congress

Media Reports

This report garnered significant media attention, with the study findings and/or PAI spokespeople cited in the following news stories:

Updated: August 10, 2021

Related PAI-Avalere Research

PAI has had a long-standing collaboration with Avalere to study hospital and health system acquisitions of physician practices in the United States between 2012-18, documenting that between 2012 to 2018 there was a dramatic, sustained trend of physicians leaving private practice.  Forty-four percent of U.S. physicians were employed by hospitals or health systems by January of 2018, compared to just one in four in 2012.  PAI and Avalere also examined the higher health care spending implications of care delivered in the hospital-owned setting versus private physician office setting and “site of service” payment policies that contributes to these consolidation trends.

What is the Impact of these Trends?

Unchecked consolidation has been shown to reduce competition in the healthcare marketplace, drive costs and spending higher and undermine medical practice innovation. Policies to level the playing field are urgently needed to preserve competition and allow physicians who choose independent practice to be able to do sustain private medical practices.    

PAI is also concerned that the growing corporatization of healthcare, if left unchecked, will result in an inappropriate incursion into the practice of medicine.  More transparency and oversight into corporate acquisitions of medical practices is needed to protect patients.  Regardless of the practice setting, physicians should retain clinical autonomy to provide high quality, cost effective care for their patients.