News: Study suggests private equity is the largest employer of physicians

A new study conducted by the American Hospital Association (AHA) has suggested that private equity and health insurers are acquiring more physicians than hospitals, according to HealthLeaders.

The study analyzed physician data from Levin Associates collected between 2019-2023. In particular, it found that physician groups and other private entities have acquired the “vast majority” of physician practices during the last five years.

The report’s data revealed that whereas private equity and physician medical groups accounted for, respectively, 65% and 14% of all physician acquisitions, hospitals and health systems accounted for only 6%.

“As physician polling data has shown,” the study noted, “most physicians are choosing to become employed rather than operate their own practice due to increased costs and burden from policies like commercial insurer prior authorizations.”

According to a separate AHA report, physician acquisition has largely been driven by ongoing financial challenges, payer policies and practices, and demanding regulatory requirements occurring across public and commercial domains.

That report found that 94% of physicians believe that it has "become more financially and administratively difficult to operate a practice,” leading physicians to alternative management avenues, seek practice acquisition, and pursue other alternatives, like seeking employment elsewhere.

The first AHA study concluded by noting that “in deals where health insurers acquire physician practices, the average number of acquired physicians per deal was more than 10 times higher for health insurers than for any other acquirer type, including hospitals and health systems.”

Editor’s note: To read the HealthLeaders article, click here. To read the AHA report on physician acquisition, click here. To read the AHA report on the cause of physician acquisition, click here.