Supermajority of U.S. physicians work for health systems or corporations

Pandemic greatly accelerated consolidation, threatening the independent practice of medicine

The number of independent physicians declined during the pandemic according to a study from Avalere.

In the U.S., 74% of physicians are employed by hospitals, health systems, or corporate entities as of Jan. 1, 2022. This is an increase from 69% last year.

While health systems and corporations have been acquiring physician practices for years, the researchers found the trend accelerate drastically since the onset of COVID-19. More than 108,000 physicians became employees since January of 2019, and of those, 83,000 became employees since the pandemic began.

“COVID-19 drove physicians to leave private practice for employment at an even more rapid pace than we’ve seen in recent years, and these trends continued to accelerate in 2021,” said Kelly Kenney, chief executive officer of PAI, in a statement. “This study underscores the fact that physicians across the nation are facing severe burnout and strain. The pressures of the pandemic forced many independent physicians to make difficult decisions to sell their practices to hospitals, health insurers or other corporate entities.”

Corporate entities such as private equity firms and health insurers are driving these trends. Corporate purchases of practices increased by 86% during the study period, and corporate employment of physicians increased by 43%. In 2021, corporate entities acquired 13,600 additional physician practices. In comparison, hospital, and health system purchases of practices (9%) and employment of physicians (11%) continued at steadier rates.

“Regardless of practice ownership, it is important to preserve the patient-physician relationship and maintain physicians’ clinical autonomy.” said Kenney. “PAI supports policies that promote these principles and allow physician-owned practices to compete with corporate and hospital-owned entities.”

Avalere used the IQVIA OneKey database that contains physician and practice location information on hospital/health system ownership. These data include solo and single-location small practices as well as large, multi-specialty, multi-location group practices. Researchers studied the three-year period from Jan. 1, 2019 to Jan. 1, 2022.