September 7, 2016

Study: Hospital ownership of physician practices rises 86% in three years

The number of physician practices owned by hospitals and health systems rose 86 percent between 2012 and 2015, according to results released today from a study prepared by Avalere Health.

By mid-2015, 38 percent of U.S. physicians were employed by hospitals and health systems, according to a news release from the Physicians Advocacy Institute (PAI), which released the findings. There were almost 50 percent more physicians employed by hospitals and health systems in 2015 than in 2012, it said.

Acquisitions of physician practices typically involve the acquisition of the services of multiple physicians through employment contracts, as well as the practice's physical building and equipment, PAI said.

PAI said it studied the trends to better understand how the changes affect the practice of medicine for physicians and also implications for patients and the wider healthcare system.

Another PAI analysis developed by Avalere earlier this year found Medicare payments for three common services are up to three times higher when performed in a hospital outpatient department instead of a physician-owned office.

The analysis found hospitals' employment of physicians and ownership of practices rose dramatically in every region of the U.S. In the Northeast, hospitals' employment of physicians rose approximately 58 percent from 2012 to 2015. Over that same time frame, hospitals' ownership of practices rose approximately 106 percent in the Northeast.

"Regardless of where they live, physicians who want to remain in private practice are under tremendous pressure," Robert Seligson, PAI president and CEO of the North Carolina Medical Society, said in the release. "Payment policies from governmental agencies and health insurance companies heavily favor large health systems and make it challenging for independent physician practices, especially smaller practices, to survive. …"

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