Report: 8,000 medical practices acquired by hospitals in 18 months

CALAAEM News Service at
Mon Mar 4 23:45:49 PST 2019


Mar. 4, 2019


Report: 8,000 medical practices acquired by hospitals in 18 months




by Joanne Finnegan | Feb 21, 2019


Over an 18-month period, hospitals acquired 8,000 more medical practices,
and 14,000 more physicians left independent practice to become hospital
employees, according to a new analysis.


Hospitals across the country continued to acquire physician practices
between July 2016 and January 2018, according to data (PDF) compiled by the
Physicians Advocacy Institute (PAI) and the consulting company Avalere


Some 44% of physicians were employed by hospitals or health systems as of
January 2018, compared to just 1 in 4 in 2012, when PAI began tracking data
on hospital acquisitions of independent medical practices, the report said.


"The continued trend of hospital-driven consolidation is dramatically
reshaping the healthcare system," said Robert Seligson, PAI's president and
CEO of the North Carolina Medical Society, in an announcement.


"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," he said.


The latest analysis adds to earlier research tracking the trend of physician
practice acquisitions and physician employment by hospitals and health
systems. Since 2012, the number of hospital-owned physician practices
increased from 35,700 to more than 80,000 in 2018. The 128% growth that
occurred in the study period, represents more than double the number of
hospital-owned practices.


The number of hospital-employed physicians increased by more than 70%, from
94,700 in mid-2012 to 168,800 in January 2018. Those numbers increased in
every six-month time period measured over the five-and-a-half-year study


The changes occurred in every part of the country, with hospital-owned
practices increasing by 91% to 303% depending on the region. Some of the
largest growth occurred in the Midwest, where more than half of all
physicians are now employed by hospitals. Nearly 40% of Midwest physician
practices were hospital-owned in 2018, the report said.


But there are some signs that independent practices are making a resurgence.
For instance, a group of North Carolina doctors sued Atrium Health to go out
on their own and established Tryon Medical Partners, an independent practice
that has now opened eight medical clinics in the Charlotte area and opened
its own $2.8 million gastrointestinal surgery center. Tyron is part of the
Association of Independent Doctors, a group promoting the practice of
independent medicine. 


The PAI report cited three implications for physicians, patients and the
healthcare system. For physicians, hospital employment can mean a loss of
clinical autonomy in treating patients but can also alleviate certain
burdens of independent practice. Government and private payer payment
policies increasingly favor integrated health systems and make it
challenging for physician practices to remain independent, the report said.


The shift also has implications for healthcare costs, the report said.
Physicians employed by hospitals or health systems perform more services in
a hospital outpatient department than independent physicians, it said. That
increases costs to Medicare and patients.


A 2016 study by Avalere and PAI documented differences in Medicare payment
for services performed in hospital outpatient departments versus physician
office settings. For four specific cardiology, orthopedic and
gastroenterology services, Medicare paid $2.7 billion more for services
performed in hospital outpatient settings, with beneficiaries facing $411
million more in financial responsibility for those services than they would
have if they were performed in independent physician offices.



Brian Potts MD, MBA
Managing Editor, CAL/AAEM News Service


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