The decadelong decline of independent physicians rolled on in 2022 and 2023 with a new high of 77.6% doctors employed by hospitals or other corporate entities as of the new year, according to a new report.
The past two years saw that share increase by 5.1%, according to the Physicians Advocacy Institute-commissioned report prepared by Avalere. Prior reports from the groups pegged the total percentage at 73.9% at the top of 2022 and 25.8% back in 2012.
Recent growth of that share has been primarily fueled by hospitals rather than other entities like private equity, payers and large pharmacy chains. All camps are coming off of a surge of employment and practice ownership gains during the early COVID-19 pandemic, when revenue disruptions drove physicians toward employers for a stable income, according to the report.
Hospital and corporate physician practice ownership, meanwhile, rose 6% since 2022 to 58.5%. Here, the corporate entities’ acquisitions have greatly outpaced those of hospitals across the past half decade as well as in the past two years.
Of note, the groups’ latest report marks the first time corporate practice ownership (30.1%) was greater than hospital and health system ownership (28.4%).
“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,” Kelly Kenney, CEO of the Physicians Advocacy Institute, said in a statement. “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.”
The report is based on data from IQVIA OneKey, a repository containing information on physicians and practices’ ownership.
All told, 503,113 physicians were employed and 357,471 practices were owned by hospitals or corporate entities as of Jan. 1, 2024, according to the data.
Employment and ownership percentages were generally higher within the Midwest, particularly in regard to hospital employment. However, the South had the highest percent of corporate-employed physicians as overall physician practice acquisitions were growing the fastest in the Northeast.
Though independent physician numbers have been dwindling for years, the trend has become a keen interest for policymakers.
Amid a crackdown on corporate entities’ profit-seeking behaviors in healthcare, regulators have moved to challenge allegedly anticompetitive practice roll-ups while lawmakers have pushed back on acquisition deals by major employers like UnitedHealth Group’s Optum. Others are challenging reimbursement policies they say make it difficult for independent groups to compete with hospitals’ growing outpatient presence.
Amid the shifting landscape, Kenney said that patients are best served if physicians’ new bosses don’t stand in the way of patient care.
“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.