Washington, DC — A new study by the Progressive Policy Institute (PPI) reveals that aggressive hospital acquisitions of independent physician practices (IPPs) are reducing competition, limiting patient access to care, and driving up prices across the U.S. health care system — trends that have serious implications for office-based, community-centric care settings. (Progressive Policy Institute)

The PPI report, Fixing a Broken System: Policy Responses to Hospital Acquisitions of Physician Practices That Limit Health Care Access for U.S. Consumers, finds that the share of physician practices owned by hospitals and large corporate entities jumped from 39 % to 59 % between 2019 and 2023, while the share of physicians employed by these entities increased from 62 % to 78 %. At the same time, independent practices — a vital source of accessible, community-based care — continue to decline sharply.

Key findings include:

• Rapid decline of independent physician practices (IPPs): Hospital acquisitions have contributed to a significant drop in IPP ownership across nine key specialties, with some specialties — including general surgery and oncology — declining up to 42 %.

• Rural communities hit hardest: Independent practice ownership declined 34 % in rural areas versus 22 % in urban areas, exacerbating existing health care access disparities.

• Consolidation drives up costs: A broad review of economic studies shows that hospital acquisitions correlate with higher prices and health spending, with average price increases around 14 % and some markets seeing increases as high as 33 %. Nearly half of these increases are driven by reimbursement rules that favor hospital-owned practices. (Progressive Policy Institute)

“Independent, office-based care provides high-quality, patient-preferred services at lower cost and closer to home,” said Dr. Bob Tahara, Health Policy Chair of OBFA. “This study underscores what many of us already see in the field: as hospitals consolidate physician practices, patients lose choice, community providers struggle to survive, and the cost of care rises.”

Hospitals that acquire physician practices often gain pricing power and the ability to bill higher facility fees for services that were once delivered in lower-cost office-based settings — a dynamic that undermines competition and strains patients’ wallets.

The 2026 Medicare Physician Fee Schedule is the first CMS regulation in recent years that recognizes the plight of independent and private practice physicians by increasing reimbursement for office-based interventional providers. OBFA urges CMS and Congress to continue to build on these foundational changes by enacting legislation to focus the PFS on paying for the work of physicians and allied professionals and reimbursing separately for office-based practice expense.

“Office-based facilities are a cornerstone of affordable, patient-centered care — but they’re under pressure like never before,” added Dr. Tahara. “We urge policymakers at all levels to act now to support payment policies and competitive practices that keep health care accessible, affordable, and rooted in community practice.”

About OBFA:

The Office-Based Facility Association represents national physician and provider organizations committed to preserving access to high-quality, office-based care through fair and sustainable Medicare payment policies. For more information, visit www.obfassociation.org.