Currently Viewing:
Newsroom

Hospital Acquisitions of Physician Practices Continue

Allison Inserro
Hospitals nationwide continued to snap up medical practices, according to updated figures about acquisition trends and the impact on physician employment.
Hospitals nationwide continued to snap up medical practices, according to updated figures about acquisition trends and the impact on physician employment.

Between July 2016 and January 2018, hospitals acquired 8000 medical practices, and an additional 14,000 physicians left private practice to become employed by hospitals, according to the report from Avalere Health and the Physicians Advocacy Institute (PAI).

PAI, a nonprofit whose mission is to advocate transparent payment policies, said the report shows how hospital acquisitions are changing the healthcare system. The report updates earlier figures that tracked the trend between 2012 and 2016.

Over the entire study period, the number of hospital-acquired physician practices increased from 35,700 in 2012 to more than 80,000 in 2018. While 25% of physicians were employed by hospitals or health systems in July 2012, by January 2018, 44% were.

Other findings in the report note:
  • Hospitals pursued acquisitions of physician practices, growing from 35,700 hospital-owned practices in July 2012 to 80,000 in January 2018. This 128% growth represents more than double the number of hospital-owned practices. 
  • Physician employment increased overall by more than 70%, growing from 94,700 employed physicians in mid-2012 to 168,800 employed physicians in January 2018.
  • All regions of the United States saw a steady climb in hospital-owned practices, ranging from 91% in the Midwest to 303% in Alaska and Hawaii. In the continental United States, the West saw an increase of nearly 148%, followed by the Northeast at 139%, and the South at 133.6%.
Since July 2015, nearly 28,000 doctors have become employed by hospitals and health systems. By January 2018, hospitals increased their ownership of physician practices to more than 31%.

As with other analyses, which have all raised concerns about the trend’s impact on healthcare prices and even quality, the report noted the impact that increased physician employment has on healthcare. Costs tend to rise for services performed in a hospital outpatient setting as opposed to a private physician’s office. Those costs are increasingly borne by government payers, such as Medicare, as well as through higher out-of-pocket costs shouldered by patients.

The report released last year from Avalere and PAI found that for 4 specific cardiology, orthopedic, and gastroenterology services, Medicare paid $2.7 billion more for services performed in outpatient settings, with beneficiaries facing $411 million more in costs for those services than they would have if they were performed in independent physician offices.

A study released last fall found that consolidation in California leads to higher prices, and another recent analysis found that consolidation has had a negative impact on quality measures used to monitor care quality as well as patient satisfaction.

 
Copyright AJMC 2006-2019 Clinical Care Targeted Communications Group, LLC. All Rights Reserved.
x
Welcome the the new and improved AJMC.com, the premier managed market network. Tell us about yourself so that we can serve you better.
Sign Up