According to a new report, by early 2021, hospitals and other corporate entities, such as insurance companies and private equity firms, own approximately 48% of doctors’ clinics.
The report was commissioned by the Physician Advocacy Institute and prepared by Avalere Health. Examining physician practice acquisition Between January 1, 2019 and January 1, 2021. The data comes from the IQVIA OneKey database.
The report shows that the number of doctor clinics owned by hospitals or corporate entities has jumped from 99,100 in January 2019 to 120,000 at the beginning of this year-an increase of 21%. The Covid-19 pandemic spurred this ownership trend. After the pandemic, the practice rate of doctors owned by hospitals or companies soared by 8.5%.
Specifically, as of January 2021, the hospital has more than a quarter (26.3%) of doctors’ clinics nationwide, up from approximately 24.3% in January 2019. The percentage of clinics owned by hospitals in the Midwest is the largest, at 37.5%, far exceeding other regions.
The proportion of doctor clinics owned by corporate entities has risen sharply-from 14.6% at the beginning of 2019 to 22.1% this year. The pandemic has once again promoted this acquisition trend. The report said that after the pandemic began, the practice rate of company-owned doctors increased by 14.6%. Southern corporate entities experienced the largest increase in practical acquisitions, an increase of 59%.
“Covid-19 has exacerbated the financial fragility of doctors’ practices, forcing them to make difficult decisions,” Kelly Kenny, CEO of the Institute of Physician Advocacy, said in a press conference. “Practice acquisition trends have potentially serious effects on competition and healthcare costs, and these effects have proven to increase with this type of market consolidation.”
Due to this integration of practices, the number of independent doctors in the United States has also declined. In 2019 and 2020, more than 48,400 doctors left independent clinics and became employees of hospitals or other corporate entities. Of these, about 22,700 reports stated that this shift was made during the Covid-19 pandemic.
This means that by January 2021, 69% of doctors are hospital or company employees.
The largest increase in the number of employed doctors (including hospital and company employees) was in the South, with an increase of 15.4%, while the number of doctors in the Northeast jumped by 11.2% between 2019 and 2020. However, overall, the Midwest is ahead of other regions, where nearly 77% of doctors are employed by hospitals or corporate entities.
Photos: maxsattana, Getty Images, Avalere Health