Small acquisitions driving the healthcare consolidation trend

With many hospital-owned physician practices exceeding federal guidelines for controlling a market, observers both inside and outside the industry may be asking why regulators aren’t blocking more of these mergers. That’s because the physician-fueled deals are too small to trigger notice by those charged with fighting monopolies.

“You have a local hospital system and they’re going in and buying one doctor at a time. It’s onesies and twosies,” Christopher Ody, a Northwestern University economist and one of the authors of the study in Health Affairs, told Kaiser Health News. “Occasionally they’re buying a group of five. But it’s this really small scale” which adds up to big results, he said.

Physician ownership of practices has dropped below 50 percent for the first time, even though consultants will argue smaller practices don’t have to give up their independent status to transition towards value-based care. According to Ody and his coauthors, about half of the growth in big practices between 2007 and 2013 involved acquisitions of practices with 10 or fewer physicians. A third of it came from hiring individual doctors.

Read the full article at the link below: