Abstract
Introduction
This study examined the extent of provider consolidation across the outpatient sector overall and analyzed variation by ownership type, including vertically integrated health systems and large corporate owners.
Methods
Using data from the Agency for Healthcare Research and Quality (AHRQ) Compendium of US Health Systems and the IQVIA OneKey Database, we analyzed changes from 2020 to 2023 in the number and share of outpatient sites and outpatient physicians affiliated with health systems and corporate owners, overall and variation by profit status, owner size, and geographic scope.
Results
The number of outpatient physicians classified as independent or other type decreased by 34 770 (−7.0 percentage points) from 2020 to 2023. Outpatient consolidation into health systems and corporate owners was relatively high in 2020 and increased modestly from 2020 to 2023. Data validation identified some risk of misclassification of parent ownership status with a potential to bias upwards the prevalence of corporate ownership.
Conclusion
Our findings on changes in outpatient consolidation provide a baseline for tracking the growth in parent ownership across the outpatient sector overall and highlight the critical need for more accurate and standardized data on ownership and organization to address key policy issues related to competition, antitrust, and quality impacts.
Keywords: organization of care, health care providers, health systems, corporate ownership
Introduction
The consolidation of providers into larger organizations has transformed the landscape of health care delivery in the United States. Prior research on physician practices has reported increasing trends over the past decade in physician employment and practice ownership by hospitals, health systems, and corporate entities.1,2 However, less research has examined the extent of provider consolidation across the outpatient sector overall and analyzed variation by parent ownership type, including vertically integrated health systems and large corporate owners.
Building on prior work,3,4 this study focused on changes in outpatient consolidation from the organizational perspective and addressed 2 questions: How did the consolidation of outpatient providers into health systems and corporate owners change from 2020 to 2023, and How did changes in outpatient consolidation from 2020 to 2023 vary by profit status, owner size, and geographic scope?
Using national data, we found that more than one-third of outpatient sites (37%) and approximately two-thirds of outpatient physicians (66%) were affiliated with 637 health systems and 593 corporate owners in 2023 (Table 1, Table S1). The findings are relevant to policymakers interested in monitoring changes in parent ownership across the landscape of outpatient care in the United States.
Table 1.
Trends in outpatient consolidation from 2020 to 2023, by ownership type.
Change 2020 to 2023 | ||||||
---|---|---|---|---|---|---|
Ownership type | 2020 | 2021 | 2022 | 2023 | Total no. | % |
Total no. | 272 554 | 280 325 | 283 138 | 279 446 | ||
Independent/other | ||||||
Total no. | 182 295 | 184 345 | 182 458 | 176 263 | −6032 | −3.8 |
Share, % | 66.9 | 65.8 | 64.4 | 63.1 | ||
Health systems | ||||||
Total no. | 65 262 | 67 460 | 69 612 | 70 432 | 5170 | 1.3 |
Share, % | 23.9 | 24.1 | 24.6 | 25.2 | ||
Corporate owners | ||||||
Total no. | 24 997 | 28 520 | 31 068 | 32 751 | 7754 | 2.5 |
Share, % | 9.2 | 10.2 | 11.0 | 11.7 |
Data and methods
Enumerating health systems and corporate owners
We used data on health systems from the Agency for Healthcare Research and Quality (AHRQ) Compendium of US Health Systems for 2020–2023 and data on corporate owners from the IQVIA OneKey Database for 2020–2023 to enumerate parent ownership status and to classify ownership type. Health systems were enumerated from Compendium data based on the AHRQ definition that included at least 1 acute care hospital and 50 or more physicians.5 Health systems included integrated systems (ie, Kaiser Permanente), church-operated systems (ie, Ascension), and investor-owned hospital chains (ie, HCA Healthcare).
Corporate owners were enumerated from corporate parent entities reported in IQVIA OneKey data. A corporate parent is an incorporated entity that includes 2 or more health care delivery sites. Corporate owners included insurers (ie, UnitedHealth Group), retail companies (ie, CVS Health), faculty practice plans (ie, Texas Tech Physicians), and large multisite physician organizations (ie, Envision Healthcare). Our study's definition of corporate owners also included integrated delivery networks that were not enumerated as health systems (eg, hospital management companies). For comparability based on size, we limited our sample to health systems and large corporate owners that included at least 1 outpatient site and 50 or more physicians. Independent physician practices and medical groups with fewer than 50 physicians were not considered to be corporate owned. Definitions and descriptions of the study sample are reported in the Supplementary Appendix and Table S2.
Measures of outpatient sites and outpatient physicians
We used the IQVIA OneKey identifier to link each health system and corporate owner to their owned sites and affiliated physicians in IQVIA OneKey data. Outpatient sites included physician practices, medical groups, clinics, health departments, outpatient surgery centers, physical medicine and rehabilitation, and imaging centers. We limited the study to outpatient sites reporting at least 1 physician, physician assistant, or nurse practitioner and located in the 50 US states and District of Columbia. Outpatient physicians included medical doctors and doctors of osteopathy who were affiliated with an outpatient site. Since physicians could be affiliated with more than 1 ownership type, we created a separate category for multiple affiliations to account for physicians affiliated with both health systems and corporate owners.
Characterizing profit status, owner size, and geographic scope
Owner profit status was categorized as nonprofit, for-profit, or government as reported in IQVIA OneKey data and based on the plurality of owned facilities and sites weighted by total physicians. For-profit ownership included investor-owned corporations and private equity firms. Owner size was measured by the number of outpatient sites and number of outpatient physicians, and size was categorized based on the percentile rank as follows: very large (90th percentile and above), large (75th to 90th percentile), medium (50th to 75th percentile), and small (below 50th percentile).
Geographic scope was categorized for each health system and corporate owner based on the overall footprint of the owner's outpatient sites reported in IQVIA OneKey data. Owners with outpatient sites located in a single metropolitan statistical area (MSA) or rural area within a single state were classified as “Metropolitan/rural area”. Owners with outpatient sites located in 2 or more MSAs within a single state were classified as “Single state”. Owners with outpatient sites located in 2 states and 3 or more states were classified as “Two states” and “3 or more states,” respectively.
Changes in outpatient consolidation
We analyzed changes from 2020 to 2023 in the number and percentage of outpatient sites and outpatient physicians affiliated with health systems and corporate owners, overall and by profit status. For the sample of health systems and corporate owners operating in both 2020 and 2023, we analyzed changes in owner size and geographic scope from 2020 to 2023. We also examined the concentration of owned sites and affiliated physicians across owner-size categories in 2023.
Limitations
Our study had several limitations. First, data on provider affiliations with health systems and corporate owners were self-reported in IQVIA OneKey data, and we lacked information on the characteristics of the parent organization (ie, insurance company, medical school). Although these data are comprehensive and widely used to study consolidation, our estimates could be biased by errors in misclassification of corporate parent entities and data quality issues resulting from idiosyncrasies with data source updates over the study period. While we excluded corporate parent entities classified as independent physician practices or medical groups with fewer than 50 physicians, our estimates of corporate ownership may be biased upwards by misclassification of large medical groups wholly owned by physicians. Second, our enumeration of health systems and corporate owners based on 50 or more physicians was arbitrary, and our study was not representative of ownership by hospitals, small health systems, and corporate legal business entities (ie, professional corporations) that did not meet our study's inclusion criteria. Third, our measure of outpatient physicians was based on affiliation with owned sites, and we could not discern physician employment status or the validity of multiple affiliation status. Finally, data on profit status were limited, and we could not make important distinctions, such as separately identifying private equity firms from investor-owned corporations within for-profit ownership.
Results
Outpatient consolidation into health systems and corporate owners
The share of outpatient sites and outpatient physicians affiliated with health systems and corporate owners increased modestly from 2020 to 2023. Compared with corporate owners, health systems' share of sites in 2023 was more than twice as large (25% vs 12%) (Table 1) and their share of physicians was nearly 4 times as large (51% vs 13%) (Table S1). Corporate owners had more rapid growth from 2020 to 2023 in the share of outpatient sites and percentage of outpatient physicians. The share of outpatient physicians with multiple affiliations increased from 1.4% in 2020 to 2.0% in 2023 (Table S1).
Trends in outpatient providers affiliated with health systems and corporate owners
Outpatient sites classified as independent or other type decreased by 6032 sites (−3.8 percentage points) from 2020 to 2023. The number of sites owned by health systems and corporate owners increased modestly from 2020 to 2023, increasing by 12 924 sites combined (Table 1). Corporate owners had more rapid growth in the number of sites, increasing by 7754 sites (+2.5 percentage points) compared with an increase of 5170 sites (+1.3 percentage points) owned by health systems.
Outpatient physicians classified as independent or other type decreased by 34 770 physicians (−7.0 percentage points) from 2020 to 2023. The number of outpatient physicians affiliated with health systems and corporate owners increased by 63 502 physicians combined (Table S1). Health systems had larger increases in the number of physicians from 2020 to 2023, increasing by 46 730 physicians (+5.1 percentage points) compared with an increase of 12 729 physicians (+1.4 percentage points) affiliated with corporate owners. Annual growth rates in outpatient consolidation into health systems and corporate owners were higher in the period 2020–2021 relative to 2022–2023.
Variation in outpatient consolidation by profit status
Trends in outpatient consolidation into health systems and corporate owners varied by profit status (Table 2). Among profit status types, nonprofit owners had the highest number of sites in 2023 (66 575 total) and increased by 7503 sites (+2.2 percentage points) from 2020 to 2023. For-profit owners had comparable growth in the number of sites from 2020 to 2023, increasing by 6291 sites (+2.0 percentage points). The annual growth rate of for-profit owners was higher in the period 2020–2021 relative to 2022–2023.
Table 2.
Trends in outpatient sites owned by health systems and corporate owners from 2020 to 2023, by profit status.
Change 2020 to 2023 | ||||||
---|---|---|---|---|---|---|
Profit status | 2020 | 2021 | 2022 | 2023 | Total no. | % |
Total no. | 272 554 | 280 325 | 283 138 | 279 446 | ||
Nonprofit | ||||||
Total no. | 59 072 | 63 308 | 65 139 | 66 575 | 7503 | 2.2 |
Share, % | 21.7 | 22.6 | 23.0 | 23.8 | ||
For-profit | ||||||
Total no. | 25 704 | 28 200 | 30 953 | 31 995 | 6291 | 2.0 |
Share, % | 9.4 | 10.1 | 10.9 | 11.4 | ||
Government | ||||||
Total no. | 5090 | 4225 | 4405 | 4439 | −651 | −0.3 |
Share, % | 1.9 | 1.5 | 1.6 | 1.6 |
Government owners had negative growth from 2020 to 2023 in the number of sites, decreasing by 651 sites (−0.3 percentage points), but relatively modest growth in the number of physicians, increasing by 1699 physicians (+0.1 percentage points) (Table S3).
Variation in size of health systems and corporate owners
The median size of health systems was more than twice as large as corporate owners based on the number of sites (48 vs 23) and number of physicians (207 vs 97) in 2023 (Table 3, Table S4). Corporate owners' size based on the number of sites grew more rapidly than health systems from 2020 to 2023 across the distribution of owner sizes. Very large corporate owners had the highest growth in size from 2020 to 2023, increasing by 17 sites and 72 physicians.
Table 3.
Variation in number of outpatient sites owned by health systems and corporate owners, 2020 vs 2023.
No. of outpatient sites per system/owner | ||||||
---|---|---|---|---|---|---|
Health systems | Percentage change | Corporate owners | Percentage change | |||
2020 | 2023 | 2020 | 2023 | |||
25th percentile | 22 | 24 | 9 | 11 | 12 | 9 |
Median | 45 | 48 | 7 | 20 | 23 | 15 |
75th percentile | 105 | 115 | 10 | 37 | 44 | 19 |
90th percentile | 238 | 286 | 20 | 71 | 88 | 24 |
Health systems (n = 578) and corporate owners (n = 405) operating in both 2020 and 2023.
Concentration of outpatient consolidation by owner size
Owned sites and affiliated physicians were concentrated in the largest-size health systems and corporate owners (Figure S1). Among corporate owners, very large organizations accounted for more than half of owned sites (19 200 total) and affiliated physicians (54 284 total) in 2023. In contrast, small health systems accounted for only 10% of owned sites and 6% of affiliated physicians.
Variation in geographic scope among health systems and corporate owners
The majority of health systems and corporate owners were limited in geographic scope to a metropolitan/rural area or a single state (Figure 1). Corporate owners had a relatively higher increase in geographic scope from 2020 to 2023, increasing from 86 to 94 owners operating in 3 or more states. Health systems had more modest increases in geographic scope from 2020 to 2023, with a total of 8 health systems reporting expansion from a metropolitan/rural area to state or multi-state.
Figure 1.
Percentage of health systems and corporate owners, by geographic scope: 2020 vs 2023.
Discussion
From 2020 to 2023, health systems and corporate owners accounted for an increasingly larger share of outpatient care in the United States. Corporate owners had relatively higher increases in the number of outpatient sites, and health systems had higher increases in the number of outpatient physicians. Growth in consolidation of outpatient sites was comparable among nonprofit and for-profit owners, and affiliated outpatient physicians were concentrated in very large organizations. The geographic scope of health systems and corporate owners increased modestly over the study period. Results of the study provide a baseline for tracking the growth in parent ownership across the outpatient sector overall.
Previous studies have reported substantial growth in practice ownership by hospitals and other organizations from 2020 to 2024.1 Our study differed from prior work by expanding on physician practices to include a broader set of outpatient site facility types that may be staffed by advanced practice clinicians (ie, retail walk-in clinics).2 Our findings also extend a previous study that reported increases in physician affiliation with health systems from 2018 to 2021.4
Our study highlights some opportunities and limitations with available data to measure and track consolidation in the outpatient sector. While the study's data sources included high-level information on corporate parent ownership for a census of outpatient sites, we found some risk of misclassification of parent ownership status, with a potential to bias upwards the prevalence of corporate ownership. There is a critical need for more accurate and standardized data on ownership and organization that can help unpack the different types of actors classified as corporate owners.
We found that growth in outpatient consolidation was relatively concentrated in larger-size health systems and corporate owners. The concentration of owned sites and affiliated physicians in a small number of very large organizations has policy implications for competition and antitrust, and consideration should be given to an owner's collective market penetration and geographic coverage.
Our findings on faster growth among for-profit owners are consistent with previous studies on the increase in private equity acquisitions in primary care and medical specialties.6 Increasing ownership by for-profit owners raises concerns about higher prices and volume,7 increased spending and utilization,8 and changes in workforce composition9 that may negatively affect the work environment and physician well-being.10
High and increasing consolidation by corporate investors and large insurers merits ongoing monitoring by policymakers to address potential concerns.11 Future research should examine the drivers of consolidation, changes in concentration within and across markets, and impacts of increased consolidation on access to care and patient-centered outcomes.
Supplementary Material
Acknowledgments
The authors thank the editor and 2 reviewers for their helpful comments.
Contributor Information
Michael F Furukawa, Center for Financing, Access, and Cost Trends, Agency for Healthcare Research and Quality, Department of Health and Human Services, Rockville, MD 20857, United States.
Jesse Crosson, Center for Financing, Access, and Cost Trends, Agency for Healthcare Research and Quality, Department of Health and Human Services, Rockville, MD 20857, United States.
Lingrui Liu, Center for Financing, Access, and Cost Trends, Agency for Healthcare Research and Quality, Department of Health and Human Services, Rockville, MD 20857, United States.
Leeann Comfort, Center for Evidence and Practice Improvement, Agency for Healthcare Research and Quality, Department of Health and Human Services, Rockville, MD 20857, United States.
Daniel Miller, Center for Financing, Access, and Cost Trends, Agency for Healthcare Research and Quality, Department of Health and Human Services, Rockville, MD 20857, United States.
Supplementary material
Supplementary material is available at Health Affairs Scholar online.
Funding
None.
Notes
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