Gallery: Percentage of hospital-employed physicians on the rise; many leaving private practice

From July 2012 to July 2015, the number of hospital-employed physicians increased by almost 50 percent, according to research from the Physicians Advocacy Institute in collaboration with Avalere Health. In each six-month time period measured over those three years, the percentage increased.

The trend even held up when examined regionally. In each region -- the Northeast, South, Midwest, West, and Alaska and Hawaii -- there was an increase in hospital-employed physicians at every measured time period, at a range of between 75-114 percent.

The data shows that the consistent increase stems from the continued growth in hospital and health system acquisitions of physician practices, which typically involve multiple physicians as well as the acquisition of the practice’s physical building and/or equipment. Additionally, the gains are partly attributable to sustained increases in the number of individual physicians entering into employment arrangements with hospitals and health systems.

Scroll through the slides to see PAI and Avalere's data and the findings contained therein.

Between 2012 and 2015, the number of physicians employed by hospitals grew by 46,000 nationwide. In the six months from July 2014 to January 2015 alone, nearly 20,000 physicians shifted into employment models.

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In 2012, one in four physicians was employed by a hospital. By 2015, 38 percent of physicians were employed by hospitals, and some of the fastest acceleration of this trend took place in late 2014.

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Between 2012 and 2015, the number of physician practices owned by hospitals grew by 31,000, an 86 percent increase. By 2015, 67,000 physician practices nationwide were hospital-owned. And in just six months, from July 2015 to January 2015, 13,000 physician practices were acquired.

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In 2012, one in seven physician practices was owned by a hospital. Hospital ownership of practices increased to one in four by 2015. Growth occurred throughout the three-year period, with some of the fastest acceleration taking place in late 2014.

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Almost half of physicians in the Midwest are employed by hospitals; it's the region with the greatest share of hospital-employed physicians. Rates of employment are lowest in the South, and in Alaska and Hawaii, where one-third of physicians are employed by hopsitals

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In every region, hospital ownership increased during the study period. More than one-third of Midwest physician practices were hospital-owned in 2015.

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All regions have seen rapid growth in hospital employment and practice ownership.

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Earlier this year, PAI and Avalere released a study documenting the differential in Medicare payment for services routinely performed in hospital outpatient department and physician office settings.

The study underscores the impact that the ongoing shift toward hospital employment and ownership of physician practices could have on spending, should this payment differential persist.

For three types of services -- cardiac imaging, colonoscopy and evaluation and management services -- Medicare pays more across an episode of care when patients receive services in a HOPD setting than in a physician-owned office, even when it's in a standalone or off-campus building.

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The shift toward employment has significant implications for physicians, the study found, but also impacts patients and the system as a whole.

For physicians, the trend brings challenges, but can alleviate certain burdens of independent practice. Government and private payer payment policies increasingly favor integrated health systems and make it challenging for physician practices to remain independent, the authors said.

For patients, this trend may impact where they receive care and also how much they will pay in cost-sharing. Overall system costs can increase as well.

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