Advocacy on Consolidation

PAI Comment Letter to Federal Regulators Detailing Implications of Industry Consolidation on Physicians and Patients

PAI submitted a detailed letter to the Federal Trade Commission (FTC), Department of Justice (DOJ) and Department of Health and Human Services (HHS) in response to a request for information regarding the implications of widespread consolidation in the healthcare industry.  Regulators are investigating the increased corporate ownership in healthcare, including physician practices. 

PAI’s letter shares findings from research it has conducted in conjunction with Avalere Health and NORC on consolidation and physicians’ experience as employees in corporate settings. 

Access PAI’s comment letter, press release, and key messages here.

PAI’s Comment Letter on Consolidation:  Key Messages to Federal Regulators

Health care consolidation is rapidly changing the face of medicine.

• Corporations have an unprecedented level of control over medical care in the United States.
  • In 2012, hospitals and health systems employed only 26% of physicians and owned only 14% of physician practices.
  • As of 2024, nearly 80% of physicians are employed, and nearly 60% of physician practices are owned by hospitals, health systems and other corporate entities.
• Unlike physicians, who have a primary ethical duty to their patients, corporations have a primary fiduciary duty to maximize profits for their shareholders. 

Corporate ownership of physician practices diminishes physician autonomy, patient care quality and health care access.

• Physicians report reduced autonomy under corporate ownership, which in turn negatively impacts patient care quality. 
• Physicians in corporate-owned medical practices have less time and communication with patients and practice policies lead them to adjust treatment options to reduce cost.
• Corporations that acquire physician practices or hospitals routinely close financially underperforming locations or departments, limiting access to care.

Consolidation makes health care less affordable for patients, payers and physicians.

• Consolidation allows corporate entities to engage in anticompetitive practices and raise prices for health care services.
  • Health care price increases of 3% to 65% are associated with hospital mergers.
• Rising health care prices have spurred increased consolidation among payers.
• Physicians face lower reimbursement from health insurers because of rising health care prices.

Federal policies pressure independent physicians and practices to consolidate with corporate entities.

• Decreasing payment for independent physicians—and increasing payment for hospitals—make practices more vulnerable to market trends that accelerate consolidation.
• A federal moratorium on physician-owned hospitals placed constraints on physicians’ ability to compete with corporate-owned hospitals to push back against consolidation.
• Medicare regulatory requirements overburden independent physicians and practices financially and administratively. 

Congress has a responsibility to address the dangerous effects of consolidation.

• Without federal intervention, health care will become increasingly inaccessible and unaffordable for patients. 
• Government payers and taxpayers are spending more on their care than they would in a more competitive marketplace.
• It is unlikely the health care marketplace will course-correct to reverse consolidation.
• Physicians Advocacy Institute policy recommendations guide action to increase regulatory oversight of practice acquisitions and corporate ownership; protect practices from the threat of financial insolvency; reduce anticompetitive business practices; and reform payment policies that drive consolidation.