More than half of U.S. physicians now work for hospital systems, and new research suggests the consolidation trend has been physician-led, rather than hospital-driven.
A qualitative study published June 10 in JAMA Network Open found that practice acquisitions at three nonprofit hospital systems were almost always initiated by physicians, primarily due to concerns about the financial viability of independent practice. Researchers conducted 37 interviews with 18 hospital system leaders and 19 employed physicians between December 2024 and April 2025.
Physicians cited rising operating costs and declining reimbursement from public and private payers as key factors pushing them toward hospital employment. Many also said they wanted to focus on patient care and shed the administrative and financial burdens of running a practice. Some cited work-life balance as a motivating factor.
“It does suggest that at least some systems are not deliberately orchestrating acquisitions to achieve anticompetitive objectives,” the authors wrote.
Hospital leaders, for their part, said they approached acquisitions largely opportunistically rather than as part of deliberate strategic planning. Key considerations included preserving patient access in rural areas and strengthening negotiating positions with health plans.
The authors called on policymakers interested in preserving independent practice to focus on strengthening the financial viability of independent practices through payment reform, infrastructure support and reduced administrative burden rather than restricting hospital acquisitions.
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