Payers, private equity and pharmacy chains own more physician practices (30.1%) than do hospitals (28.4%).
More than three-quarters of the nation's physicians (77.6%) are employed by hospitals, health systems or other businesses, according to a report commissioned by the Physicians Advocacy Institute.
The new data, compiled by Avalere, reaffirms a decade-long steady transferal of medical practice ownership. In 2012, 25.8% of physicians were employed by hospitals or health systems. Since then, hospitals and health systems have hired nearly 263,000 physicians.
In a five-year span between Jan. 1, 2019, and Dec. 31, 2023, more than 44,000 practices were acquired, although that number slowed in 2022 and 2023, when 8,100 practices transferred ownership.
Currently, 58.5% of physician practices are owned by non-physicians. As of Jan. 1, 2024, physician practice ownership by corporations (30.1%)—including health insurers, private equity firms and large pharmacy chains—surpassed ownership by hospitals and health systems (28.4%) for the first time.
"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," PAI CEO Kelly Kenney says in a media release.
"Physicians have an ethical responsibility to their patients' health," Kenney says. "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."
The transition to non-physician ownership accelerated during the COVID-19 pandemic as physicians contended with burnout. In 2022 and 2023, 19,100 physicians left independent practices to join hospitals, health systems or corporations. Of those, 16,000 were hired by hospitals and health systems. In the past five years more than 127,000 physicians transitioned to employees of hospitals, health systems or corporations.
"As the medical practice model continues to shift toward affiliated and owned practices, it's absolutely critical that physicians retain autonomy over medical decisions and their relationship with patients remains grounded in providing the best clinical guidance," Kenney said.
Click here for the details of Avalere's methodology.
“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.”
CEO Kelly Kenney, CEO, Physicians Advocacy Institute
John Commins is the news editor for HealthLeaders.
KEY TAKEAWAYS
New data reaffirms a decade-long steady transferal of medical practice ownership.
In 2012, 25.8% of physicians were employed by hospitals or health systems.
Since then, hospitals and health systems have hired nearly 263,000 physicians.
Currently, 58.5% of physician practices are owned by non-physicians.