Nearly Half of Primary Care Docs Affiliated With Hospitals

Nearly half of a sample of primary care physicians (PCPs) in the United States were affiliated with hospitals in 2022, almost double the percentage just 13 years earlier in 2009, a new study of nearly 200,000 physicians found. Their negotiated prices for office visits are more than 10% higher than for independent physicians.

Meanwhile, 1.5% of PCPs were affiliated with private equity (PE) firms in 2022, and their office visit prices were nearly 8% higher, Yashaswini Singh, PhD, MPA, of Brown University School of Public Health, Providence, Rhode Island, and colleagues reported in JAMA Health Forum.

“The corporate transformation of primary care is underway,” Singh said. “Hospital and PE affiliation of primary care physicians has been increasing over time with the potential to increase the cost of care. At the same time, there is no evidence that these trends benefit patients or physicians.”

In fact, Singh said, the findings regarding pricing suggests that “large national insurers may not be using their bargaining power to negotiate lower prices that improve the affordability of care.”

The researchers launched the study to better understand trends in affiliation and their impact on prices, Singh said. As the study noted, “physicians are increasingly moving away from solo and small practices toward larger organizations. More than three fourths of physicians are employed by health systems or corporate entities.”

Most US hospitals are part of a larger system, so health system and hospital affiliation are interrelated, Singh explained.

Hospitals and private equity investors have been especially drawn to primary care due in part to “increased demand for coordinated care and the potential to negotiate higher payment rates from commercial insurers,” the study said.

In Some States, More Than 75% of PCPs Are Hospital-Affiliated

Singh and colleagues analyzed data regarding 198,097 PCPs, including about 62% of all PCPs in 2022. They also analyzed negotiated price information from Aetna, Blue Cross Blue Shield, Cigna, and United Healthcare.

The percentage of PCPs affiliated with hospitals grew from 25.2% in 2009 to 47.9% in 2022. These physicians had higher prices for office visits than independent physicians in 2022: $14.91 (95% CI, 8.92-27.64) or 10.7% (95% CI, 10.1-11.4, P less than .001) higher.

In some parts of the country, more than 75% of PCPs were hospital-affiliated including Wisconsin (83.2%) and North Dakota (86.2%).

The study didn’t identify PE-affiliated PCPs prior to 2013. PE-affiliated physicians also charged more for office visits than independent physicians in 2022. Florida (6.3%) and Texas (3.4%) had the highest shares of PE-affiliated PCPs.

“Hospital-affiliated and PE-affiliated PCPs have greater bargaining power in negotiations with commercial insurers,” Singh said. “As a result, they can negotiate higher prices than prices negotiated by an independent PCP.”

This study noted limitations such as missed PE acquisitions and the lack of evidence that affiliation directly affects prices. It’s also not clear whether physicians who charge more actually earn more money.

In addition, “other types of corporate entities are also involved in primary care but are not included in our study given a lack of systematic data on ownership affiliations of physician practices,” Singh said. They include health insurers, retail companies, and venture capital-backed primary care practices.

Why Are So Many PCPs Teaming Up With Hospitals?

In an interview, Alison Evans Cuellar, PhD, MBA, of College of Public Health, George Mason University, in Fairfax, Virginia, said the study provides new insights, thanks to transparency laws that require disclosure of data such as the costs of medical services, she said.

Why are primary care physicians attracted to affiliations with hospitals? They may appreciate being part of larger groups, she said, so they don’t need to worry as much about the complications of managing their practices and juggling contracts.

A quirk in Medicare reimbursement policy allows higher payments to clinics that are based at hospital campuses or properties. Primary care also is moving toward better integration with inpatient and post-inpatient care, she added.

However, “we have not seen this integration lower costs and improve quality,” Cuellar said.

In fact, as hospitals buy up individual practices, they capture wider segments of the market and gain more power in negotiating prices with insurers, she said.

Arnold Ventures and Patient Rights Advocates funded this study.

Singh reported receiving grants from Arnold Ventures and National Institute for Health Care Management Foundation. Other authors reported various disclosures including receiving grants from Arnold Ventures, Patient Rights Advocates, National Institute on Aging, Robert Wood Johnson Foundation, and Commonwealth Fund and personal fees from Analysis Group.

Cuellar disclosed receiving funding from NIH and the Robert Wood Johnson Foundation.

Randy Dotinga is an independent writer and board member of the Association of Health Care Journalists.