Physician Practice Ownership Shifts as More Doctors Join Larger Organizations

The share of physicians practicing independently has fallen sharply. All but 38 percent of physicians have left or sold their practices, according to the article. The majority now work for hospital systems, private equity firms or insurers.

Physicians who remain independent have increasingly adopted concierge medicine. Patients in these practices pay an annual fee, typically several thousand dollars and in some cases $20,000 or more, for enhanced access. The model allows doctors to see fewer patients and spend more time per visit.

Industry data show the number of physicians in concierge and direct primary care models more than doubled between 2018 and 2023. Private equity-backed groups now employ roughly 8 percent of physicians, nearly double the share recorded in 2022.

Medicare and Medicaid reimbursement rates have not kept pace with inflation. Prior authorization requirements require physicians and staff to spend an average of 13 hours each week on approvals. Staffing, technology, compliance and malpractice costs have also risen.

Physicians who join hospital systems receive reimbursement rates 8 to 10 percent higher on average than those in independent practice. More than 60 percent of U.S. physicians are now employed by hospitals, health systems or corporate entities, up from about 40 percent a decade ago.

Studies cited in the article link sales to private equity with subsequent staffing reductions, higher utilization and declines in multiple measures of care quality. The article states that joining larger organizations can increase costs for patients and small business owners.