We wrote a blog post in 2020 discussing the impact of the pandemic on private practice physicians, struggling to keep their doors open. Primary practice physicians, dermatologists, ophthalmologists, and a host of other specialties suddenly found their patients staying away to avoid COVID, and the physicians’ revenues plummeted. A recent report highlights how much the pandemic accelerated acquisitions of private practices.

The incidence of private medical practices being purchased by hospitals and other large medical entities was already well-underway before COVID, for numerous reasons, but this was accelerated during the pandemic. This report found that in the pandemic era nearly three-fourths of U.S. physicians in private practice became employed by hospitals and other corporate medical systems.

The numbers are startling. Since January, 2019, over 100,000 physicians shifted to employment, and 76% of those did so since the beginning of the pandemic. The authors of the report point out that mounting financial pressures and burnout and stress may have provided the final push to close or sell a practice and move to employed status. 

As noted in our earlier blog post, there were pre-existing factors that likely undermined the ability to maintain a private practice: the high overhead cost of maintaining the practice, lowered reimbursement, and administrative burdens. In addition, private equity money has begun to focus on medical practices, and this has reduced the satisfaction level for physicians devoted to caring for patients as opposed to increasing the bottom-line profits. 

Every region of the county experienced the trends to increased physician employment, although there some variations: practices in the South saw a 94% increase in acquisitions by corporate entities. And the Midwest had the highest percentage of physicians employed by corporate entities: 63.5%.         

The effects of this trends on patient care and malpractice claimants will be the focus of another blog post.