Physician consolidation by the numbers: 5 key takeaways

Independent physician practices are disappearing as hospitals, payers, corporate entities and private equity expand their reach, according to a new Government Accountability Office report.

 Here are five key takeaways:

1.In 2024, just 42% of physicians worked in private practice, down from 60% in 2012. Nearly half (47%) were employed by or affiliated with hospitals.

2. Corporate entities, including insurers and private equity firms, employed 23% of physicians in 2024, up from 15% in 2019. Private equity-owned practices now account for 6.5% of physicians, with PE controlling more than 30% of doctors in certain specialties like gastroenterology, dermatology and ophthalmology.

3. Hospital-physician integration reached 66% in the Midwest and 58% in rural areas in 2024, outpacing other regions.

4. All 10 of the largest U.S. insurers now own practices or management service organizations. UnitedHealth Group’s Optum alone employs about 9,000 physicians, affiliates with around 90,000, and controlled 2.7% of the national primary care market in 2023. Insurer-run practices provided roughly 4% of all Medicare primary care services that year.

5. The report links consolidation to higher prices: office visits cost about 17% more after hospital-physician integration, inpatient prices rose 3% to 5% and OB/GYN childbirth services saw a 15% price increase. In Medicare, shifting services into hospital outpatient departments raised spending by billions. However, the Congressional Budget Office projects that aligning payment rates between outpatient and physician-office services could save nearly $157 billion from 2025 to 2034.

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