One-in-four medical practices is now owned by a hospital or health system, and hospitals employed 38% of all U.S. physicians in 2015.
Hospitals have gone on a physician feeding frenzy, with the number of practices owned by hospitals and health systems rising 86% from 2012-15, a study from the Physicians Advocacy Institute shows.
The acquisitions are occurring in all regions of the country over the three-year span, according to the report, which also found that 38% of U.S. physicians were employed by hospitals and health systems in mid-2015.
That’s a 50% increase between 2012 and 2015, growing from 95,000 employed physicians in 2012 to more than 140,000 employed physicians in 2015.
A further analysis found that hospitals acquired 31,000 physician practices from 2012 to 2015 and now own one-in-four practices nationwide. The acquisitions typically include the services of multiple physicians through employment contracts, as well as the practice’s physical building and equipment.
Regionally over the three-year span, employment of physicians rose
- 59% in the South
- 58% in the Northeast
- 49% in Alaska and Hawaii
- 44% in the Midwest
- 33% in the West
Over that same time frame, hospitals’ ownership of practices rose
- 118% in Alaska and Hawaii
- 106% in the Northeast
- 98% in the South
- 82% in the West
- 72% in the Midwest
“Regardless of where they live, physicians who want to remain in private practice are under tremendous pressure,” said Robert Seligson, PAI president and CEO of the North Carolina Medical Society, in remarks accompanying the study.
“Payment policies from governmental agencies and health insurance companies heavily favor large health systems and make it challenging for independent physician practices, especially smaller practices, to survive,” Seligson said.
“Just like what’s happened with local book stores and corner grocers, it is increasingly hard for local physicians to own their practice. The incentives are stacked against them.”
Another PAI analysis earlier this year found Medicare payments for three common services are up to three times higher when performed in a hospital outpatient department instead of a physician-owned office.
“Medicare spends less when patients receive treatment in a physician’s office, yet the number of physician-owned medical practices is rapidly shrinking,” said Kelly Kenney, PAI executive vice president.
“The shift toward more physicians employed by hospitals could mean higher costs for the entire healthcare system. For patients, it impacts both where they receive and how much they pay for care.”