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Blog | Strategic Partnerships Mergers and Acquisitions

Report finds fewer than a third of physicians continue to practice independently

Blog | Strategic Partnerships Mergers and Acquisitions

Report finds fewer than a third of physicians continue to practice independently

By amplifying the financial risk facing smaller practices in particular, the COVID-19 pandemic hastened the consolidation trend.

For advocates who tout the benefits of independent physician practice, trends revealed in a new report are cause for concern.

As described in new research by the Physicians Advocacy Institute and Avalere, only 30% of U.S. physicians practiced medicine independently heading into 2021. The remaining 70% were employed by health systems or corporate entities such as private equity firms and health plans.

The COVID-19 pandemic intensified the trend as smaller practices struggled financially. Between the outset of the pandemic and the start of 2021, 11,400 additional physicians became hospital employees and 11,300 became employees of corporate entities.

When considering the entire study period, 2019 and 2020, the percentage increases in physician employment were 5% at hospitals and 31% among corporate entities.

At the practice level, hospitals made 3,200 acquisitions (8% increase) and corporate entities made 17,700 (32%) during the two-year period. The share of hospital- or corporate-owned practices rose from 38.8% to 48.4%.

The trend is especially evident in certain regions. During the two-year period, increases in the South were 15.4% in the employment of physicians and 28.7% in the acquisition of practices. In the Midwest, by comparison, the increases were 8.8% and 19.9%, respectively.

Some of the difference may stem from the fact that the Midwest had higher shares of employed physicians at the start of the pandemic — more than 70%, compared with under 60% in the South.

Striving to ensure physician autonomy

The concern about such trends is with the potential impact on the field of medicine, although acquisitions also may reduce some aspects of administrative burden and offer physicians greater access to capital. There have been few if any definitive studies detailing the effects of hospital-physician mergers on care quality; a March 2020 report by the Medicare Payment and Advisory Commission described the impact as “indeterminate.”

In a recent letter to Congress, Kelly Kenney, CEO of the Physicians Advocacy Institute, wrote, “Regardless of the practice setting, we believe that physicians should retain clinical autonomy to provide high-quality, cost-effective care for their patients. This report shows a startling shift towards the corporatization of healthcare across the U.S., which if left unchecked, may result in an inappropriate incursion into the practice of medicine.

“PAI urges Congress to consider policies to help protect the physician-patient relationship from undue corporate interference. Federal regulatory scrutiny into corporate acquisitions of medical practices is needed.”

In January, the Federal Trade Commission announced it would conduct a large-scale claims-based study of the competitive impact of hospital-physician consolidation.

About the Author

Nick Hut

is a senior editor with HFMA, Westchester, Ill. (

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