A recent analysis by Avalere Health and the Physicians Advocacy Institute (PAI) found that from July 2016 – July 2018, United States hospitals have acquired approximately 8,000 physicians’ practices nationwide. On top of the 5,000 physicians’ practices acquisitions from July 2015-2016, this number is up over 128% year over year from where healthcare was, as an industry, only 5 years ago.

Why are hospitals buying physicians’ practices?

As patients continue to move toward more affordable, accessible treatment options, hospitals are starting to shift their investments toward outpatient centers to keep up with market demands, preserve their patient populations, and maintain their revenue streams. Unlike hospitals, outpatient facilities such as urgent care clinics, ambulatory centers, or doctors’ offices, are smaller and generally focus on a single specialty. This allows them to provide their patients with more flexibility and improved value-based care.

Large-scale mergers and acquisitions have already begun to transform the healthcare industry. Acquiring physicians’ practices is a method health systems use to reduce their overall costs and increase their market share. This transformation is happening at a fast clip. In 2012, it was estimated that only about 35,000 practices were affiliated with a larger healthcare enterprise which has since jumped to over 80,000 practices by the start of 2018. Robust acquisition activity is underway and will only continue to increase.

How does this impact physicians and their patients?

Acquiring private practices makes sense for larger health systems as they tend to have deeper pockets and a much larger reach than the individual doctor. However, acquisitions are even more beneficial to the clinicians and the patients they serve than they are to the larger enterprises. Hospital-owned physicians’ practices have a much easier time with referrals as they are able to easily send patients to an in-network hospital or ambulatory center for lab work, x-rays, or specialist consultation.

Keeping patients and procedures within the same health network leads to lower patient costs and reduces the chance of providing duplicate services or overlooking symptoms of a medical condition. Staying within the network also provides many patients with peace of mind that they’ll remain within trusted, confident hands and that they will always have access to the highest quality treatments and care.

More locations, more data to manage

As healthcare systems continue to acquire more hospitals and outpatient facilities, the opportunity for networked physicians to improve the quality of care by streamlining patient records and healthcare data is exponential.

Most clinicians will agree that the migration to a digital health record environment within an EMR system is the most transformative change to healthcare and patient data management in the past century. In fact, EMRs work best when there’s an opportunity for integration and interoperability. As healthcare enterprise consolidation continues to rise, the ability to share patient information from one physician within a healthcare network to another in a separate department, building, or even state is critical to meeting growing patient expectations and enabling quicker, better care.