Physician Practices NAICS 621111

Aug 1, 2025 - Practice Acquisition By Hospitals Increases

• Hospitals are buying small physician practices and that is driving up the price of care, according to the National Bureau of Economic Research (NBEA). About 42.2% of physicians worked in private practices (a practice that was wholly-owned by physicians) in 2024, down from 60% in 2012, according to the American Medical Association's Physician Practice Benchmark Survey. Health systems see opportunities to achieve more clinical integration and expand referral networks by acquiring independent physician practices. The acquisitions aren't limited to hospitals: Private equity, insurers, and businesses like Amazon are also acquiring medical practices from doctors facing declining reimbursement and high overhead costs.
• Federal legislators ignored a request by a group of medical societies and physician groups to change the Senate proposal for the 2026 Medicare Physician Fee Schedule to match one that was passed in the US House of Representatives version of the One Big Beautiful Bill reconciliation legislation. The 75 groups and societies said that the Medicare Payment provision in the House-passed One Big Beautiful Bill represents a "critical step" toward stabilizing the Medicare Physician Fee Schedule. The Senate passed its version of the reconciliation legislation on July 1 without adjusting its 2026 Medicare Physician Fee Schedule proposal. The legislation signed into law by President Trump included the unmodified Senate proposal which, like the US House version, contains a one-year 2.5% increase in the Medicare Physician Fee Schedule conversion factor for 2026. Medicare physician payments have decreased 33% since 2001 when adjusted for inflation, according to Healthcare Finance, with visible consequences, including the loss of independent physicians and practices in rural areas. The Senate version of the bill also includes steeper cuts to Medicaid than the projected $715 billion in the House version of the bill that passed in May.

• There were 3,943 physician practice management (PPM) transactions in which private equity firms (PE) were involved during the past 10 years, according to Pitchbook. PEs focus on acquiring a sizable practice or a platform investment in the physician practice segment and then use this corporate foundation to expand through add-on acquisitions. The demand from PE remains robust, according to Pitchbook, resulting in a wave of outreach to physician practice owners nationwide.
• Physician practice employment and average wages for nonsupervisory employees increased slightly during the first six months of 2025, according to the US Bureau of Labor Statistics (BLS). Revenue for physician offices increased 9.3% year over year and 3.9% quarter over quarter in the fourth quarter of 2024, according to the US Census Bureau. The Producer Price Index for physician practices increased 1.76% year over year in July, according to the BLS.