Survey: More physician practices owned by corporations than hospitals

The overlords have gone corporate.

For the first time, corporations own more physician practices than health systems or hospitals, according to an analysis from not-for-profit advocacy group the Physician Advocacy Institute (PAI).

Per the analysis, which uses data from healthcare consulting and advisory firm Avalere, 30.1% of physician practices are owned by corporations, which include insurers, private equity (PE) firms, and large pharmacy chains, compared to 28.4% of hospital- and health system-owned facilities, as of January 1. Overall, non-physicians own nearly three in five physician practices (58.5%), according to the analysis.

“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,” PAI CEO Kelly Kenney said in a statement. “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.”

The shift is reflective of a larger staffing trend in healthcare: Doctors are hanging up their white coats to work at insurance companies like UnitedHealth Group, which employs 10% of the nation’s physicians, or PE firms are acquiring them.

Between 2022 and 2023, more than 19,000 physicians left an independent practice to join a hospital, health system, or corporation, according to earlier research from Avalere and PAI. These organizations also acquired more than 44,000 practices between January 2019 and January 2024, per the analysis released this month.

Corporations that acquired physician practices targeted the Midwest (87.4% increase) and the South (115.6% increase), according to the analysis. By the start of 2024, the South reported the highest percentage of corporate-employed physicians (26.4%) and the Northeast saw “the fastest growth in overall physician practice acquisitions” (10%), per the analysis.

“As the medical practice model continues to shift toward affiliated and owned practices, it’s absolutely critical that physicians retain autonomy over medical decisions and their relationship with patients remains grounded in providing the best clinical guidance,” Kenney said in the statement.

Methodology: Avalere used analytics company IQVIA’s OneKey database, which tracks facilities and practice ownership information, to compile the report. “Physicians are defined as medical doctors and doctors of osteopathy,” per the analysis. “Nurse practitioners, physician assistants, and other non-physician providers are not included.”