Almost 70% of US physicians now work as employees of a hospital, health system, or private corporation, a 12% increase from before the COVID-19 pandemic. This finding from a June 2021 Avalere Health report in collaboration with Physicians Advocacy Institute (PAI)—COVID-19’s Impact on Acquisition of Physician Practices and Physician Employment 2019-2020—demonstrates the pandemic’s most direct effect on ownership and employment trends.

In its 2-year study, conducted between January 1, 2019 and January 1, 2021, Avalere looked at the two key consolidation trends for both national and regional levels. The first trend was acquisitions of physician practices by hospitals, health systems, and other corporate entities, such as insurers and private-equity firms. The second trend was physicians leaving independent medical practices for employment with the same types of hospitals, health systems, and other corporate entities. All trends observed were impacted by COVID-19.

The study showed three key findings:

  1. There was accelerated nationwide growth in acquisitions of physician practices and employed physicians. Nationally, 48,400 additional physicians left independent practice, 22,700 of whom left after the onset of COVID-19. Hospital and other corporate entities acquired 20,900 additional physician practices over the 2-year period, resulting in a 25% increase in corporate-owned practices.
  2. Hospital acquisitions of physician practices and employed physicians continued. Nationally, 18,600 additional physicians left independent practice to become hospital employees, with 11,400 of that shift occurring after the onset of COVID-19. Hospitals acquired 3,200 additional physician practices over the 2-year period, resulting in an 8% increase in hospital-owned practices.
  3. Corporate acquisitions of physician practices and employed physicians accelerated. Nationally, 29,800 additional physicians left independent practice to become employees of corporate entities, with 11,300 of that shift occurring after the onset of COVID-19. Corporations acquired 17,700 additional physician practices over the 2-year period, resulting in a 32% increase in corporate-owned practices.

Understanding the extent and impact of these trends is important for all healthcare professionals given the implications on healthcare spending, and, in many cases, the continuity of the patient-physician relationship.

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