Study details and key findings

For the study, researchers analyzed 276 practice acquisitions and 66 "hospital integration events," or one-year periods where the share of physicians practicing at a hospital increased significantly, between 2008 and 2016. During this time, the share of physician practices owned by a hospital increased by 71.5% and the share of physicians integrated with a hospital increased from 27.5% to 47.2%.

Using claims from a large insurer, the researchers found that hospital prices increased by an average of 3.3% ($475) and physician prices increased by an average of 15.1% ($502) for privately covered labor and delivery services in the two years after an integration event. Additional analyses also found 9% price increases among physicians who were already integrated into a hospital after additional physicians in their specialty were acquired.

According to the researchers, these increases in prices are likely driven by reduced competition post-acquisitions. Further statistical tests conducted with the researchers' model also found that price effects were larger under different market circumstances, such as when an acquiring hospital has more power than a local insurance network — something the researchers said reinforce a broader association between decreased competition and higher prices.

"Our estimates suggest that taking action against many physician-hospital mergers could help preserve competition in health care markets and keep prices from rising," the researchers wrote.

"These are thousands and thousands of very small transactions and the question is: What do you do about them?" said Zack Cooper, an economist at Yale University and one of the study's authors. "[The FTC] clearly do not have the resources to block every acquisition of three physicians."

Commentary

The trend of physicians being employed by hospitals instead of private practices has only continued since the study period.

According to recent survey data from the American Medical Association, only 42.2% of physicians worked in private practice in 2024, down from 46.7% in 2022 and 60% in 2012. In 2024, more than a third of physicians worked in a hospital-owned practice, and 12% were either directly employed or contracted by a hospital. 

The American Hospital Association (AHA) heavily criticized the study and its findings, saying that it is flawed and relies heavily on outdated information from an insurer that has become a major acquirer of physician practices.

"In other words, the study conveniently ignores one of the largest factors impacting physician employment in recent years," said Aaron Wesolowski, AHA's VP of research strategy and policy communications. "Beyond this, the study makes very little attempt to acknowledge many of the well-documented factors driving physician practices to integrate with hospitals in the first place."

"Hospital partnerships for physicians and their practices can offer stability and resources, including upfront investments, infrastructure improvements, electronic health records alignment and facility upgrades, allowing for the continuation of access to care, especially in rural communities," Wesolowski said.

Instead of focusing on hospitals, Wesolowski said researchers should focus on corporate insurers and other entities that are the main drivers behind physician acquisitions.

"We surveyed physicians and advanced practice providers to better understand why they choose to work for an independent practice vs. a hospital or health system vs. a corporate medical group. What we learned is that no employer is the definitive 'winner.' Instead, organizations must create a compelling value proposition to recruit and retain physician talent," Roller said.