Independent practices have been in steady decline over the last two decades, as hospitals and health systems have grown in size and market influence and the cost of operations whittles away at physicians’ bottom lines.
Here are 10 statistics shaping physician consolidation:
1. In 2024, 42.2% of physicians were working in private practice, a significant drop from 60.1% in 2012, according to the American Medical Association’s “Physician Practice Benchmark Report,” published May 29.
2. Private practice now represents less than half of physicians in most medical specialties, with participation ranging from 30.7% in cardiology to 46.9% in radiology.
3. According to a study published in July by the National Bureau of Economic Research, which analyzed hospital acquisitions of physician practices between 2008 and 2016, the share of physician practices acquired by hospitals rose by 71.5% in the study period.
4. By 2016, nearly half of practices were hospital-owned. At the end of the study period, hospitals owned 47.2% of all physician practices.
5. Prices rose after mergers, but quality didn’t. Two years post-merger, prices increased by 3.3% for hospital services and 15.1% for physician services, with no measurable improvements in quality, according to the study.
6. Certain deal structures drove sharper price increases. Mergers with high potential for foreclosure (where physicians refer patients to the acquiring hospital) and recapture (where insurers must accept bundled “all-or-nothing” contracts for hospital and physician services) saw the largest price hikes.
7. Most deals escaped antitrust scrutiny. Nearly all of the mergers studied fell below the Federal Trade Commission’s Hart-Scott-Rodino reporting threshold, meaning they likely went unreviewed by federal regulators.
8. Between 2013 and 2022, the number of hospital-employed physicians increased by 33%, from around 157,000 to more than 205,000. In comparison, private practices grew by just 17%, according to a May report in the Journal of the Society of Laparoscopic and Robotic Surgeons.
9. Total employed physicians continue to rise. Over the past decade, the number of employed physicians grew by 22%, from about 620,000 in 2013 to more than 760,000 in 2022.
10. Payer-operated physician practices have also been on the rise according to a newly published study in Health Affairs Scholar. Payer-operated practices accounted for 4.2% of Medicare primary care services in 2023, up from 0.78% in 2016. Optum, the physician practice branch of UnitedHealth Group, controlled 2.71% of the national market by service volume, making it the dominant payer-affiliated provider in primary care.
