What You Should Know:
– A new study by Avalere commissioned by the Physicians Advocacy Institute (PAI) paints a clear picture: the landscape of US medical practice ownership is shifting dramatically. As of January 2024, a staggering 77.6% of US physicians are employed by hospitals, health systems, or corporate entities.
– The trend has been steadily increasing over the past five years, with over 44,000 practices acquired by these entities since 2019. Over 19,100 physicians left independent practices to join hospitals, health systems, or corporations in 2022 and 2023 alone.
Study Background/Methodology
The study utilized the IQVIA OneKey database, which tracks physician and practice location information, including hospital/health system ownership, for both solo practices and large group practices. The data spans from January 2019 to January 2024.
Key findings of the report include:
- Physician Practice Consolidation: The trend of medical practice consolidation continued through 2022 and 2023, with over 8,100 practices acquired in those two years alone.
- Shifting Ownership: For the first time, corporate ownership (30.1%) surpassed hospital and health system ownership (28.4%). This includes ownership by health insurers, private equity firms, and large pharmacy chains.
- Independent Practices Shrinking: Only 41.5% of practices remain independent, with over half (58.5%) now owned by non-physicians.
Concerns and Implications
The PAI emphasizes concerns about the impact of corporate ownership on patient care. Kelly Kenney, CEO of PAI, highlights the potential conflict between a physician’s ethical responsibility to patient health and a corporation’s focus on shareholder profits.
The COVID-19 Factor
The study identifies the COVID-19 pandemic as a major accelerator of this trend. Increased physician burnout and financial strain during the pandemic likely fueled the rise of practice acquisitions by non-physician entities.
“Corporate entities are assuming control of physician practices and changing the face of medicine in the United States with little to no scrutiny from regulators,” said Kelly Kenney, chief executive officer of PAI. “Physicians have an ethical responsibility to their patients’ health. By contrast, corporate entities have a fiduciary responsibility to their shareholders and are motivated to put profits first. In some arrangements, these interests can conflict with providing the best medical care to patients.”
