Physician practices were most often acquired by hospital systems after physicians initiated the process because of concerns about the financial viability of independent practice, according to a qualitative study published in JAMA Network Open.
The study adds stakeholder perspectives to a contentious evidence base. The researchers noted that hospital acquisitions of physician practices have been linked to higher prices for physician and hospital services, while evidence on quality of care has been mixed.
Researchers conducted 37 semistructured interviews from December 2024 to April 2025 with 18 hospital system leaders and 19 employed physicians across 3 nonprofit hospital systems. The participants represented 6 hospitals in the South, Midwest, Southwest, West, and Northeast, including 2 rural hospitals. Researchers initially planned to conduct up to 50 interviews but stopped conducting interviews at 37 after concluding that thematic saturation had been reached.
“Study findings offer insights about the motivation for acquisitions, their operational challenges, and potential implications for patient care,” wrote lead study author Gary J. Young, JD, PhD, of Northeastern University, and colleagues.
The researchers noted that more than 50% of active physicians worked for hospital systems as of 2024, compared with 20% in 2010. Hospital systems have acquired more than 20,000 physician practices since 2015.
Researchers used a purposive sample of hospital systems with experience acquiring physician practices. Six systems were invited to participate, 4 agreed, and 1 later withdrew because of a merger. Interviewees were selected in collaboration with a representative from each participating hospital system, a detail that may limit the range of perspectives captured. Interviews were conducted by video conference, lasted approximately 60 minutes, and were professionally transcribed. About 20% of transcripts were independently double coded, with an overall mean κ of 0.83 and mean agreement of 97%.
Hospital leaders and physicians reported that practice acquisitions were usually initiated by physicians rather than hospital systems. Interviewees identified rising operating costs and declining reimbursement from public and private payers as common factors affecting the financial viability of independent practice. Physicians also reported seeking hospital employment to focus more on patient care and less on practice management, while some cited work-life balance considerations.
The authors argued that this physician-initiation finding complicates the narrative that hospital systems are primarily driving acquisitions to expand market power. They wrote that the finding may be relevant to antitrust enforcement, while also acknowledging that physician-initiated acquisitions do not eliminate the risk that hospital systems may use acquisitions to strengthen negotiating leverage with health plans.
The researchers also positioned the findings within ongoing state policy debates. They argued that state efforts to restrict hospital acquisition of physician practices may address consolidation without addressing what they described as a weakened independent physician sector. Policies aimed at payment reform, infrastructure support, and reduced administrative burden may be needed if policymakers want to preserve independent practice, they wrote.
Hospital leaders said acquisitions were seldom central to strategic planning and were often approached opportunistically. However, leaders identified several factors that could influence acquisition decisions, including preserving access to care in rural communities, expanding access to clinical specialties, and strengthening negotiating positions with health plans.
Hospital leaders and physicians reported that acquisitions could create opportunities to improve care by giving employed physicians access to hospital-system clinical infrastructure, including electronic health records and patient-level clinical data. Interviewees said shared electronic health records connected physicians with other hospital-based clinicians and supported continuity of care through within-system referrals.
However, the study captured stakeholder perceptions rather than measured patient outcomes. Most system leaders reported no attempt to measure a practice’s baseline quality or evaluate its performance over time following acquisition. The authors also noted a broader puzzle in the literature: if the patient-care benefits described by interviewees are apparent, it remains unclear why large-scale studies have not detected stronger and more consistent improvements in patient outcomes for integrated hospital systems.
Participants reported that acquisitions could expand access to care for underserved patients. Many physicians said they cared for more patients with Medicaid and more patients without insurance coverage following acquisition than they did in independent practice. Hospital leaders also described using acquired practices as touchpoints for initiatives focused on food insecurity, housing insecurity, and disease prevention.
At the same time, interviewees reported that acquisitions could disrupt care for some existing patients when their insurance plans did not include the acquiring hospital system.
Operational tensions were prominent following integration. Hospital leaders expressed frustration with the productivity of employed physicians and referenced differences in relative value units and patient panel size compared with independent physicians affiliated with their systems. Leaders often attributed those differences to financial incentives.
Employed physicians generally reported that they maintained a high level of productivity in patient care while having fewer administrative responsibilities than physicians in independent practice. Interviewees from both groups said designing compensation incentives acceptable to hospital systems and physicians remained a work in progress.
Practice support was another source of disagreement. Some physicians reported receiving more support staff following acquisition but less than they had been promised. They also reported difficulty obtaining additional staffing as patient volumes increased. Hospital leaders, in contrast, said physicians often did not justify staffing requests from a business perspective.
The same within-system referrals that interviewees described as aiding continuity of care could also create pressure. Researchers did not identify reports of explicit requirements that physicians refer patients within their hospital systems. However, some hospital leaders acknowledged encouraging within-system referrals, and several physicians reported that such encouragement could create subtle pressure. Other physicians said they frequently referred within the system because electronic health records made those referrals easier.
Some physicians also described early friction with independent physicians on the same medical staff, including concerns about trust, communication, and competition for patients. Although many said these tensions softened over time, the researchers noted that the early postacquisition period could involve strain and lost camaraderie.
Most physicians identified reduced autonomy as the primary disadvantage of hospital employment. These concerns generally involved hiring decisions, staffing, work schedules, and workplace arrangements rather than clinical decision-making.
Many physicians also reported limited onboarding following acquisition, describing a process in which they were largely expected to adapt independently to new personnel, workflows, and electronic health record systems.
The findings may not generalize to all physician practice acquisitions. The study included only 3 nonprofit hospital systems from a consortium of nonprofit hospitals. The dynamics may differ in acquisitions involving for-profit systems, private equity firms, or health plans, which the researchers noted are also active purchasers of physician practices.
The researchers acknowledged several limitations. Participation was voluntary, raising the possibility that interviewees held stronger opinions about physician integration than nonparticipants. The study also did not include patients, whom the researchers described as an important stakeholder group for evaluating the effects of physician practice acquisitions on patient care.
Conflict of interest disclosures noted that the sample was selected from The Academy Advisors, a consortium of nonprofit hospitals that also provided study funding. No other disclosures were reported. The study was supported by The Academy Advisors and the Agency for Healthcare Research and Quality. The funders had no role in the study design, data collection, analysis, manuscript preparation, review, approval, or publication decision.
Source: JAMA Network Open
