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More than half of US physicians now work for or contract with fewer than 700 healthcare systems across the country, according to a new study in Health Affairs.

Between 2016 and 2018, the percentage of physicians affiliated with a healthcare system — defined as an organization that includes at least 50 physicians, 10 primary care doctors, and one nonfederal acute care hospital — increased by 11 percentage points, jumping from 40% to 51%. The proportion of primary care physicians affiliated with healthcare systems rose from 38% to 49%, the study found.

The researchers, led by Michael F. Furukawa, PhD, the acting director of the Division of Healthcare Delivery and Systems Research in the Center for Evidence and Practice Improvement at the Agency for Healthcare Research and Quality (AHRQ), used AHRQ data on healthcare systems as well as data from IMS Health and IQVIA to identify system-affiliated physicians.

Their findings confirm and extend earlier research showing a major increase in physician employment by hospitals over the past decade. For example, a survey by the American Medical Association (AMA) found that in 2018, 8% of doctors worked directly for a hospital, and nearly 27% worked for a hospital-owned practice, up from 5.6% and 23% in 2012, respectively. Another study, by Avelere Health and the Physicians Advocacy Institute (PAI), found that in 2018, 44% of physicians were employed by hospitals and health systems, up from 41.7% in 2016.

The authors of the current study note that they did not measure the full extent of industry consolidation, partly because they excluded hospitals that employed fewer than 50 doctors. So why did their results show that so many more doctors were working for hospitals than earlier studies did?

One reason is that not all of the physicians affiliated with healthcare systems are employed by them, Furukawa told Medscape Medical News. For example, he said, physicians in the Sharp Community Medical Group in San Diego do not work directly for Sharp Healthcare. They receive their paychecks from the group, which contracts with the healthcare system for their services. (That arrangement is in line with California’s corporate practice of medicine law, which bars most hospitals from directly employing doctors.)

The AMA and Avelere/PAI studies also used different kinds of data, Furukawa added. The AMA survey, for instance, relied on member reports that aren’t frequently updated, he said.

Michael La Penna, a healthcare consultant based in Grand Rapids, Michigan, told Medscape Medical News that he isn’t surprised that a majority of doctors are affiliated with hospitals. The study’s results, he said, “told us what we already knew” from observing facts on the ground. In some cities, he noted, it’s hard to find independent practices.

Read more here.

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