Welcome to this special edition of PAI’s Research Digest. This edition focuses on important findings from a study of physician practice trends between 2019-21.
The study found a sharp acceleration in the ongoing trends of hospitals and other corporate entities, such as private equity firms and health insurers, acquiring physician practices and the correlating trend of physicians leaving private practice in the period following the onset of the Covid-19 pandemic.
Nearly 3 in 4 U.S. physicians were employed by hospital systems and other corporate entities by the end of 2021, leaving just 26% of the nation’s physicians practicing independently. In comparison, only one quarter of physicians were employed by hospitals or health systems in 2012.
Learn more here and below.
Kelly Kenney
Chief Executive Officer, Physicians Advocacy Institute
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California Medical Association - Connecticut State Medical Society - Medical Association of Georgia - Medical Society of the State of New York - Nebraska Medical Association - North Carolina Medical Society - South Carolina Medical Association - Tennessee Medical Association - Texas Medical Association
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Report: COVID-19’s Impact on Acquisitions of Physician Practices and Physician Employment 2019-2021
PAI and Avalere I April 2022
National Physician Employment Trends
Over the three-year study period ending in 2021, 108,700 additional physicians left independent practice and became employees of hospitals or other corporate entities. Eighty-three thousand (76%) of that growth occurred after the onset of Covid-19.
- 58,200 additional physicians became hospital employees between 2019-21.
- 51,000 of that growth occurred after the onset of Covid-19.
- 50,500 additional physicians became employees of corporate entities between 2019-21.
- 32,000 of that growth occurred after the onset of Covid-19.
By the end of 2021, nearly three out of four (74%) physicians were employed by hospitals, health systems or corporate entities such as private equity firms or health insurers.
- 52.1% of physicians were employed by hospitals and health systems.
- 21.8% of physicians were employed by other types of corporate entities.
National Medical Practice Acquisitions and Ownership Trends
Hospitals and other corporate entities acquired 36,200 additional physician practices over the three-year period (a 36% increase).
- Hospitals acquired 4,800 additional physician practices over the three-year period, resulting in an 8% increase in hospital-owned practices.
- Corporate entities acquired 31,300 additional physician practices over the three-year period, an 84% increase in corporate-owned practices. Most of that growth (22,900) occurred following the onset of COVID-19.
By January 2022, hospitals and corporate entities owned more than half (53.6%) of physician practices in the United States.
- Ownership is almost evenly split between hospitals/health systems (26.4%) and other types of corporate entities (27.2%).
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Regional Physician Employment and Practice Acquisitions Trends
All regions of the country experienced continued growth in physician employment and practice acquisitions throughout the three-year study period that accelerated in the last half of 2020 and throughout 2021, showing the significant impact of the pandemic countrywide.
- The percentage of hospital or corporate-owned practices increased between 28.3% (Midwest) and 43.9% (South).
- The percentage of hospital or corporate-employed physicians grew between 13.3% (Midwest) and 23.8% (South).
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Implications
The growing corporatization of health care by profit-driven entities must be monitored and potentially addressed in order to protect patients against any inappropriate incursions into the practice of medicine. PAI advocates for policies to increase transparency and oversight of corporate acquisitions of independent medical practices, while proactively advocating for independent private medical practices and their abilities to remain a viable option for patient care in this country. Regardless of the practice setting, physicians must retain autonomy in their clinical decision making when caring for their patients.
Previous PAI-Avalere studies show that Medicare spending is significantly higher for the same services provided in hospital-owned outpatient settings versus the physician office setting.
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