More than 77% of U.S. physicians are employed by hospitals, health systems or corporate entities, according to an Avalere study sponsored by Physicians Advocacy Institute.
The analysis shows that health systems and other corporate entities continue to drive consolidation in healthcare by aggressively acquiring physician practices — particularly in the period following the beginning of the COVID-19 pandemic.
Five things to know:
1. From 2022 to 2023, the percentage of employed physicians grew by 5.1%, with recent growth in physician employment primarily attributed to hospitals over other types of corporate owners.
2. Over the two-year period, 19,100 physicians became employees of hospitals or corporate entities, suggesting a slowing of the significant jump in employment in the post-COVID-19 period, according to the report. Corporate physician employment peaked in January 2023 and has leveled off.
3. Hospitals and other corporations acquired 8,100 physician practices over the last two years, a 6% increase in the percentage of hospital or corporate-owned practices since 2022.
4. Between January 2019 and January 2024, more than 44,000 practices were acquired, with 58.5% now owned by non-physicians. As of Jan. 1, 2024, physician practice ownership by corporations (30.1%) — including payers, private equity firms and large pharmacy chains — surpassed ownership by hospitals and health systems (28.4%) for the first time.
5. Optum is the largest employer of physicians in the U.S., with almost 90,000 employed or affiliated physicians.
"Corporate entities are assuming control of physician practices and changing the face of medicine in the United States with little to no scrutiny from regulators," Kelly Kenney, CEO of Physicians Advocacy Institute, said in an April 11 news release shared with Becker's. "Physicians have an ethical responsibility to their patients' health. By contrast, corporate entities have a fiduciary responsibility to their shareholders and are motivated to put profits first. In some arrangements, these interests can conflict with providing the best medical care to patients."
Click here for more details on the analysis.