Physician Advocate Institute: Hospital Ownership of Physician Practices Increases Nearly 90 Percent in Three Years

According to a new study by the Physician Advocate Institute (PAI) and Avalere Health, the number of physician practices owned by hospitals or health systems rose 86 percent between 2012 and 2015. To reach this conclusion, Avalere examined a database of payment information maintained by SK&A, a health care consultancy, to pinpoint practice ownership and location and cross reference it with recent acquisitions by hospitals/health systems. The report found that hospitals acquired 31,000 physician practices between 2012 and 2015 and that one in four medical practices was hospital-owned by 2015. Furthermore, approximately 38 percent of physicians in the U.S. were employed by a hospital or health system.


This trend was found to be consistent across the entire U.S, with Alaska and Hawaii (118 increase in hospital/health system ownership of physician practices), the Northeast (106 percent), and the South (98 percent) the most affected.

PAI commissioned this analysis to better understand how these changes in physician employment affect the broader healthcare industry and what the implications are for patients and providers. In a separate study earlier this year, PAI and Avalere found that Medicare payments for three common healthcare service are on average three times higher when performed in a hospital outpatient department instead of a physician-owned office.

To read the full report, CLICK HERE.

For a PAI press release that contains a more detailed summary, CLICK HERE.

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