The race to acquire physicians

As reimbursements in healthcare sink and inflation soars, many physicians are turning away from private practice to the stability of employment. 

From 2019 to 2021, more than 108,700 physicians left private practice for employment opportunities, according to a report from Avalere. As of January 2022, nearly 74 percent of physicians reported being employees. 

Younger physicians in particular, many of whom are facing higher debts and a more unstable workforce, are looking to employment. A total of 85% of physicians 40 and younger work for an employer, according to Medscape's 2023 "Young Physician Compensation Report."

Additionally, new physicians are being pushed to employment through a lack of education on the business of medicine, one leader said. 

"We're not training residents to be independent," Edward Zoltan, MD, a urologist at New York Health Urology Division in New York City, told Becker's in 2022. "We're not giving the same kind of autonomy to residents like we did 20 years ago."

Many physicians, including Loay Kabbani, MD, a vascular surgery specialist at Detroit-based Henry Ford Health, are concerned about the loss of autonomy that comes with private practice physician decline.

"This one factor makes physicians vulnerable to the whims of large corporations," Dr. Kabbani told Becker's. "As physicians become more and more employed, we lose control of our practice and our patient-physician relationships. The new generation is more about timing in and out."

Hospitals are not the only entities looking to hire physicians. 

Retail clinics, urgent care centers, telehealth platforms and private equity firms also have entered the race for physicians. And according to a report from AMN Healthcare, payers have been looking to add physicians in the last few years. 

UnitedHealth Group-owned Optum, the largest employer of physicians and parent company of ASC chain SCA Health, added 20,000 physicians in 2023. The company also inked three major physician practice deals in 2023 and has made moves to acquire a fourth this year. The group's rapid growth is "raising antitrust and noncompete concerns as more payers and private equity firms pursue medical practice acquisitions," according to a December report from Medscape

The quick and aggressive growth of groups such as Optum is raising alarms for many leaders. Udaya Bhaskar Padakandla, MD, president of the Texas Society of Anesthesiologists, told Becker's he is concerned about the "vertical integration sweeping the healthcare industry."

"This increasingly leads to loss of independence in the decision-making ability of physicians in patients' best interest, and second, government watchdogs (like the FTC) are passive onlookers to this dominance of the physician workforce by a monopolizing entity," he told Becker's. "But at the same time, much smaller physician groups (with 3,000 to 5,000 physicians) get sued by the same entity for 'monopolizing' the marketplace."

Optum is not the only group racing to employ physicians. 

Amazon completed its $3.9 billion acquisition of virtual and in-person primary care company One Medical last year; the move gave Amazon access to more than 200 brick-and-mortar physicians offices. In May, CVS Health completed its $10.6 billion acquisition of primary care company Oak Street Health, based in Chicago. 

Despite the industry shift, many leaders are trying to help secure the survival of private practices. 

"Small private practices give physicians the ability to provide the best care for their patients and to adapt to changes quickly and effectively," Joseph Anderson, MD, professor of medicine at Dartmouth Geisel School of Medicine in Hanover, N.H., told Becker's in 2022. "Small private practices are the lifeblood of U.S. medicine, and their ability to survive is vital to healthcare in this country."

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Webinars

Featured Whitepapers

Featured Podcast