The Government Accountability Office (GAO) has released a new report examining the extent and effects of physician consolidation. The report confirms that consolidation among hospitals, insurers, and private equity firms is associated with higher costs for patients and Medicare without clear evidence of better quality, while also raising concerns about competition and access. GAO also noted that as consolidation grows, remaining independent practices may face increasing challenges such as reduced leverage in negotiating contracts, difficulty securing referrals, or pressure to affiliate with larger entities for access to hospital systems, payment rates, or technology infrastructure. These pressures can accelerate the trend toward consolidation, leaving fewer options for independent physician-led care.
Key findings include:
- Nearly half of physicians were employed by or affiliated with hospital systems in 2024, up from less than 30% in 2012.
- Private equity accounted for about 6.5% of physician practice ownership in 2024, with variation by specialty and geography.
- Hospital-physician consolidation was associated with higher Medicare spending and commercial insurance prices, but little change in quality.
- Early evidence suggests private equity ownership may also contribute to higher commercial prices.
- Gaps remain in understanding the effects of consolidation on patient access, affordability, and outcomes.
This growing consolidation highlights the importance of strengthening policies that preserve physician independence, ensure competitive markets, and maintain patient access to high-quality, affordable care.