Hospital-employed physicians command significantly higher commercial reimbursement rates than independent peers across every specialty, with a $92 average gap in blended evaluation and management rates in the Chicago market, and the cost difference extends well beyond the professional fee, according to 2026 Trilliant Health price transparency data.
Employed urologists averaged $263 per blended E/M visit compared with $141 for independent urologists, a $122 gap. Employed gastroenterologists averaged $240 versus $141 for independents, employed orthopedic surgeons averaged $260 versus $154, and employed cardiologists averaged $234 versus $144. Even the smallest gap, primary care at $196 employed versus $154 independent, represents a 27% premium for identical services.
The stakes are significant given how many physicians have moved into hospital employment. Approximately 253,000 physicians became employees of hospitals or corporate entities between January 2018 and January 2026, and 79.5% of physicians who sold their practices to a hospital or health system cited the ability to negotiate higher payment rates as an important or very important reason for doing so.
As of 2026, 59.4% of U.S. physicians are hospital-employed nationally, with rates as high as 78.8% in hematology and oncology and 77.4% in cardiology, which are two specialties where the employed-versus-independent rate gap in the Chicago market was among the widest studied.
The Medicare Payment Advisory Commission has estimated that Medicare spent $1.6 billion more on evaluation and management office visits performed in vertically integrated hospital outpatient departments than it would have at freestanding office rates.
Studies of the site-of-service differential find payment gaps of 74% to 224% for specialist services and approximately 78% for primary care visits when the same service is billed in a hospital outpatient department rather than a physician office, reflecting the addition of a facility fee rather than any change in the underlying clinical service.
Trilliant noted the professional rate gap understates the full cost difference, since hospital employment frequently triggers facility fees and directs subsequent imaging, laboratory and procedural volume toward higher-cost hospital outpatient settings.
Patients also bear a share of the burden directly: because coinsurance and deductibles are calculated as a percentage of the negotiated rate, a patient who sees an employed physician for an identical visit can face higher out-of-pocket costs than one who sees an independent physician, often without knowing it.
As the employed share of physicians continues to grow, Trilliant warned that self-funded employers and patients will face increasing costs for physician services even without any change in the volume or clinical content of care delivered.
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