Rise of hospital-physician practice M&A

 In eight years, the share of physicians working for hospitals nearly doubled due to hospital acquisitions of physician practices — and with it came rising prices, a recent study found.

The study, published in July 2025 by the National Bureau of Economic Research, analyzed hospital acquisitions of physician practices between 2008 and 2016. Using data and machine learning algorithms, researchers identified a large number of integration events spanning different competitive circumstances. These were merged with claims data from a large national insurer to study the impact on prices. 

Here are  five findings:

1. Between 2008 and 2016, the share of private physician practices acquired by a hospital rose by 71.5%

2. By 2016, 47.2% of physician practices were owned by a hospital.

3. Two years after a merger, hospital and physicians prices increased by 3.3% and 15.1%, respectively, with no “discernible effects on quality measures,” according to the study’s authors.

4. Price increases were larger among mergers that had a greater scope for foreclosure, whereby physicians’ patients bring their patients into the care of the acquiring hospital, and recapture, when insurers are forced to negotiate “all-or-nothing” deals with hospitals for physician services. 

5. Nearly all of the estimated deal valuations of physician-hospital mergers analyzed in the study fell below the Federal Trade Commission’s Hart-Scott-Rodino merger reporting thresholds.

https://www.beckershospitalreview.com/quality/hospital-physician-relationships/the-rise-of-hospital-physician-practice-ma-5-things-to-know/