Hospitals, health systems and corporations continue to scoop up physician practices as consolidation in healthcare accelerates, according to a new report from Avalere Health for the Physicians Advocacy Institute.
The report found that more than four in five U.S. physicians were employed by hospitals, health systems or corporate entities like health insurance plans and private equity firms by the end of 2025. This builds on previous research from PAI and Avalere Health, providing a nearly decade-long analysis of what the organizations call a "dramatic restructuring" of America's medical practice.
Physicians have historically practiced in physician-owned settings, but that has significantly changed over the last ten years.
Hospitals began a rapid acquisition spree in 2012 when just one in four physicians was employed by hospitals. The trend accelerated by 2018 and through the COVID-19 pandemic, as hospitals and corporate entities increasingly acquired physician practices, the report showed.
Physician practice acquisitions slowed in the post-pandemic period, but this shift away from physician-owned settings has persisted to this day.
Physician employment, acquisitions continue through 2024-2025
The report showed that hospitals and corporate entities employed another 48,000 physicians in 2024 and 2025, leaving just 18% of physicians practicing in a physician-owned setting by the start of this year.
Hospitals, health systems and other corporate entities also acquired an additional 13,900 physician practices during that time, bringing their total to 64% of all U.S. practices by the end of 2025.
Hospitals led the charge, adding another 44,000 physicians to their payrolls from 2024 to 2025, representing an 8.2% increase. The organizations also acquired 5,800 practices nationwide, a 7.8% increase over the two years.
But PAI CEO Kelly Kenney still described the consolidation trend as a "corporate takeover of physician practices," which continues unabated.
Corporate physician employment still accelerated by 0.9% from 2024 to 2025, with 4,200 more physicians.
Corporate entities also acquired 8,000 physician practices during the time, representing a 10.2% increase. All U.S. regions also experienced significant growth in corporate practice acquisitions.
Rural practices were especially affected by acquisitions, the report also showed. About 2,900 more physicians practicing in rural areas became employees of hospitals and other corporate entities from 2024 to 2025. Another 1,200 rural practices were also acquired.
How consolidation is changing medicine
The shift in physician employment is changing how doctors practice medicine in the U.S., according to Kenney.
"Whereas corporate owners have a fiduciary responsibility to their shareholders, physicians always have an ethical responsibility to their patients," she said. "Now is the time to adopt policies to protect against corporate interference in physicians' medical decision-making."
Employed physicians don't have as much clinical autonomy, according to previous research from PAI. Over half of these physicians said in the 2023 survey that changes in practice ownership reduced the quality of patient care, as practices focused more on financial incentives. Forty-five percent also said ownership changes worsened their relationships with patients.
However, the survey also found that physicians moved from independent practice to a hospital or corporate entity to achieve better work-life balance and earn more money. Low government reimbursement and cuts to private payer rates drove the decision to become employed.
CMS slashed Medicare physician rates in the years following that PAI report, only recently finalizing a 2.5% increase to Physician Fee Schedule rates in 2026. However, the American Medical Association said the one-time boost passed by Congress is still not enough to keep pace with rising practice costs.
These rate updates undercut the viability of private physician practices, pushing smaller clinics to sell to larger corporate entities or hospital systems, physicians argue. But hospitals and other corporate entities have justified their spending sprees as a stabilizing force for distressed physician practices, saving access to care if these practices closed, particularly in rural areas.
The American Hospital Association also explained last year that when hospitals acquire practices, they are more likely to take on less profitable specialties, whereas corporate entities strategically structure practice acquisitions to maximize profit over access.
The PAI report confirmed corporate entities' ongoing interest in acquiring physician practices, although those deals have slowed since the pandemic and corporate entities employ fewer physicians than hospitals and health systems.
Kenney said the latter especially begs the question of "whether private equity firms and other corporate owners are shedding physicians from practices post-acquisition."
As consolidation shows no signs of reversing, the coming years will likely determine whether policy interventions can preserve physician autonomy and patient-centered care, or if the corporate transformation of American medicine will become the permanent standard.
Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.
