PAI Research

Physicians Advocacy Institute

Updated April 2022

Physician Employment Trends

PAI-Avalere Health Report on Trends in Physician Employment and Acquisitions of Medical Practices: 2019-2021

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.

Key Findings:

Nearly 3 of 4 physicians are now employed by hospitals, health systems and other corporate entities such as private equity firms and health insurers.     

  • More than one hundred thousand (108,700) physicians shifted to employment since January 2019. This growth split nearly evenly between hospital employees (58,200 additional physician employees) and other corporate entities (50,500 additional physician employees).
  • Of those, 83,000 physicians (76%) became employees since the pandemic began.
  • 2021 alone saw a marked increase in employed physicians, growing by 19%, from 69.3% to 73.9% of all physicians.

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:

  • Hospitals and corporate entities, including private equity firms and insurance companies, now own over half (52.1%) of physician practices (hospitals own 26.4% and other corporate entities own 27.2%). 
  • While hospital and health system acquisitions continued at a steady pace (9% growth), the sharpest increase (86% growth) in medical practice acquisitions over the three-year study period was by corporate entities.
  • 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 and throughout 2021. 
  • Every region of the country saw a steady trend towards increased employment and hospital and corporate ownership of practices, but there are distinct differences among regions.
    • The South saw the highest rate of acquisitions by corporate entities (94% increase). 
    • The Midwest continued to have the highest percentage of physicians employed by hospitals and health systems (63.5%, growing 9% over the study period).

Download the Full Report, Key Findings and Press Release

Media Reports

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

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.