Private equity firms, hospitals or other corporate entities employ nearly 70% of doctors in 2021, according to new data from the Physicians Advocacy Institute.
The COVID-19 pandemic has accelerated this decade-long trend as business interests “dramatically” reshape the practice of medicine. Corporate entities own half of the nation’s medical practices, with private equity and similar stakeholders producing the sharpest increase (32%) in acquisitions between 2019-2020.
CEO Kelly Kenney believes docs must retain clinical autonomy and is urging Washington to act.
“This report shows a startling shift towards the corporatization of healthcare across the U.S., which if left unchecked, may result in an inappropriate incursion into the practice of medicine,” she wrote in a recent letter to Congress. “PAI urges Congress to consider policies to help protect the physician-patient relationship from undue corporate interference.”
Consulting firm Avalere prepared the report using 2019 and 2020 stats from the IQVIA One Key database. During those two years, corporations acquired 20,900 practices while 48,000 additional doctors vacated independence to work for a hospital or other large entity.
Every U.S. region experienced consolidation, with a more pronounced uptick in 2020’s second half. Hospital ownership gains ranged from 6%-11% depending on the geography, and corporate ownership surged 44%-59%. The analysis included solo and single-location small practices, plus large, multi-specialty groups with several.
Kenney urged Congress to lift the moratorium on physician-owned hospitals, alongside further action to help docs.
“Physicians who choose private practice need to be able to sustain those practices and compete in the healthcare marketplace,” she wrote. “The continued trend for physicians to sell their practices and become employees comes as no surprise, as physicians routinely cite high administrative costs that detract from time with patients, onerous regulatory compliance burden and expense, and anticompetitive contracting and payment practices by dominant insurers and hospitals.”
The report does not mention radiology, however, the specialty has experienced its share of recent corporatization. About 54% of radiologists work in private practice versus 37% in employment arrangements, one survey found. Another noted an uptick in rads practicing in private equity arrangements, while a third unearthed concerns about these trends among early career radiologists.