Hospital acquisition of physician practices up 128% in 5.5 years: 4 details

Hospitals acquired 8,000 medical practices between July 2016 and January 2018, according to data from Avalere Health and the Physicians Advocacy Institute.

The key details to know:

1. Between July 2012 and January 2018, the number of hospital-acquired physician practices rose from 35,700 to 80,000, an increase of 128 percent, or double the number of hospital-owned practices.

2. From July 2016 to January 2018, 14,000 physicians left private practice and joined hospitals; 44 percent of physicians in the U.S. were employed by hospitals or health systems in January 2018, an increase from one in four in July 2012.

"The continued trend of hospital-driven consolidation is dramatically reshaping the healthcare system," said PAI president and CEO of the North Carolina Medical Society Robert Seligson. "PAI will continue to advocate for fair, transparent policies and champion physician clinical autonomy, regardless of the practice setting, to ensure that physicians can continue to deliver the best possible care to their patients."

3. All U.S. regions experienced an increase in hospital-owned practices over the course of the time frame studied, with regions seeing a total increase in the range of 91 percent to 303 percent.

4. Physician employment rose from 94,700 employed physicians in mid-2012 to 168,800 in January 2018, an increase of over 70 percent.

"As the health field moves from volume-based to value-based care, America’s hospitals and health systems are working with physicians, other caregivers and their communities to create a better system of care for patients that is coordinated, convenient and more economical and efficient," said Melinda Hatton, general counsel for the American Hospital Association in a statement to Becker's ASC Review. "These changes in the health care field are leading many hospitals and health systems to explore new ways to improve quality, reduce costs, become more responsive and provide more convenient access to care to meet their patients’ needs. Hospitals are strengthening linkages to each other, and to physicians, in an effort to improve quality and efficiency and to better coordinate patient care."

More articles on transactions and valuation:
Rothman Orthopaedics aims to expand nationally with NueHealth, MUVE joint venture: 5 things to know
Mayo Clinic's $1B capital investments include surgery center: 3 notes
Syracuse Orthopedic Specialists opening orthopedic surgery center in April — 5 insights

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