Physicians Advocacy Institute
Updated April 2022
This research shows that the pandemic accelerated the ongoing trend of physicians leaving private practice for employment, spurred by hospitals and other corporate entities acquiring medical practices, part of a wave of consolidation throughout the healthcare industry. This study added 2021 data to an ongoing review by Avalere Health and PAI of these trends and found a significant surge in practice acquisitions and increased physician employment last year.
Nearly 3 of 4 physicians are now employed by hospitals, health systems and 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 2019-2021, especially during the period following the beginning of the COVID-19 pandemic.
Other findings include:
Download the Full Report, Key Findings and Press Release
Earlier versions of this study garnered significant media attention, with the study findings and/or PAI spokespeople cited in the following news stories:
Updated: August 10, 2021
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.
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.