Corporate groups pass hospitals in ownership of physician practices

For physicians, the move from independent practices continues.

Most doctors are working for hospitals or corporations. In a first, corporate ownership of physician practices has surpassed hospital ownership.

More than 3 out of 4 doctors (77.6%) are employed by hospitals or corporate entities, according to a new report issued this week by the Physicians Advocacy Institute and Avalere.

While that trend has been continuing for some time, the report documented a new development worthy of attention.

For the first time, corporations or corporate entities now own more physician practices than hospitals and health systems, according to the report. Corporate entities own 30.1% of physician practices, while hospitals own 28.4% of practices.

• Read more: Hospital mergers in first quarter reach highest number since 2020

Under the report’s definition, corporate entities include health insurers, private equity firms, and large pharmacy chains.

Kelly Kenney, CEO of the Physicians Advocacy Institute, says the growing dominance of corporate entities carries important implications.

“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,” Kenney said in a news release accompanying the report.

“Physicians have an ethical responsibility to their patients’ health,” Kenney said. “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.”

A solid majority of America’s physician practices (58.5%) are owned by non-physicians, the report states.

Corporate entities are taking the lead, but hospitals, health systems and corporations are all moving aggressively to acquire more physician practices, the report suggests.

Hospitals and health systems have taken ownership of more physician practices in recent years. Between July 2012 and January 2024, hospitals and health systems have employed nearly 263,000 additional physicians.

Many doctors opted against going it alone in 2022 and 2023, as some struggled with burnout and heavy workloads during the COVID-19 pandemic, the report states. In 2022 and 2023, 19,100 doctors left independent practices to work for hospitals, health systems or corporate entities, according to the report.

• Read more: Doctors and medical students are battling burnout

“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 a statement.

Between January 2019 and January 2024, more than 127,000 doctors began working for hospitals or corporate entities, the report states.

Other key findings

• In 2022 and 2023, hospitals and health systems acquired 2,800 physician practices. The percentage of hospital-owned practices rose 7.3%.
• Corporate entities acquired 5,300 physician practices in 2022 and 2023. The percentage of corporate-owned practices rose 11% in those two years.
• Physician employment rose sharply over the past five years, topping half a million. More than 503,000 doctors were employed in January 2024, up from 387 million in January 2019.
• Acquisitions by corporate entities rose 115.6% in the South between 2019 and 2023, and by 87.4% in the Midwest.