Seven observations and predictions related to physician practice ownership in 2020:
1. Hospitals and health systems remain active acquirers of physician practices, according to VMG Health's 2020 "Healthcare M&A Report." From 2012-18, the number of hospital-owned practices increased at an average annual growth rate of about 12.3 percent. The number of hospital-employed physicians rose at an average annual growth rate of about 17.5 percent in the same period.
2. Earlier this year, Avanza Healthcare Strategies predicted that more ASCs owned by hospitals or health systems will be structured as physician-hospital joint ventures. As the trend toward joint ventures continues, hospital and health system leaders cite ownership by employed physicians and engaging outside managers as common issues, Avanza President and CEO Joan Dentler said in an email newsletter.
3. The number of physician-owned practices considering a sale has tripled in light of the COVID-19 pandemic, according to information gathered by Physicians First. Here, Physicians First's Eric Yetter shared five factors for prospective sellers to consider.
4. Physicians who retire from small practices increasingly aren't replaced, as physicians new to medicine opt for hospital employment instead, according to research published Jan. 14 in the Annals of Internal Medicine.
5. Changes could be coming for physician-owned hospitals. On Aug. 4, CMS proposed removing some provisions in the expansion exception process for physician-owned hospitals that serve high numbers of Medicaid inpatients in the 2021 Outpatient Prospective Payment System proposed rule.
Earlier in the pandemic, Sen. Ted Cruz, R-Texas, introduced a bill that would let physician-owned hospitals expand their number of beds and surgical rooms without limitations during the emergency period.
6. In early September, Global Healthcare Advisors, a boutique investment bank focused on healthcare mergers and acquisitions, provided a snapshot of ownership distribution in the ASC market:
- Physician owner: 64 percent
- Physician-hospital owner: 24 percent
- Corporate owner: 4 percent
- Physician-corporate owner: 4 percent
- Hospital owner: 3 percent
- Physician-hospital-corporate owner: 1 percent
7. The physician networking site Doximity surveyed 90,000 licensed, full-time U.S. physicians, finding that 49.1 percent were employed by either a hospital or a physician-owned group in 2018. Just over 31 percent reported being independent providers.
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