Commoditization and corporatization of the U.S. economy may sound like complicated, theoretical jargon, but these trends have reshaped fundamental aspects of our daily lives.
American consumers have accepted less competition and choice as small, personalized service shops and local businesses are replaced by Fortune 500 companies. We have adjusted to the mixed implications of this economic restructuring, sacrificing the friendly, personalized experience and customer service offered by local businesses for the “one-stop” shopping experience.
The healthcare sector has not escaped this trend. As a relentless tide of consolidation washes over the industry, independent physicians are in danger of extinction across the U.S.
For more than a decade, hospital chains, private equity-backed firms, health insurance companies and other corporate conglomerates have acquired physician practices at a breakneck speed. A perfect storm of market conditions and various government policies—including disparate Medicare payment structures and regulatory restrictions on physician ownership—that tilt the scales in favor of large, integrated entities has driven a flurry of acquisitions. Burdensome and expensive regulatory mandates further hinder the economic viability of small independent practices.
The pace of this transformation is startling. Physicians Advocacy Institute (PAI)-Avalere research shows that in 2012, only a quarter of physicians were employed. A decade later, a large majority of physicians had left private practice. By the start of 2024, nearly 80% of U.S. physicians were employed, and almost 60% of physician practices were owned by hospitals or other corporations.
The shift away from independent medical practice also raises serious access concerns, particularly for those in rural areas. A new PAI-Avalere analysis shows that, as the reach of hospitals and corporations in rural healthcare grew between 2019 and 2024, patients lost access to nearly 2,500 physicians and 3,300 medical practices.
For those that remain, the perils of corporate conglomerates running the system are becoming increasingly clear. Mounting evidence shows that corporate medical practice owners undermine physicians’ vital role in delivering high-quality, patient-centered care. A physician’s ability to make unbiased, evidence-based care decisions is paramount to their ethical duty to every patient. Corporate entities, however, often treat physicians as commodities and patients as nameless, faceless consumers.
The primary goal of corporate conglomerate owners—increasing profit, in many cases to position the practices for eventual sale—is far removed from and even in opposition to the interests of physicians and their patients. This central objective is responsible for weakened patient-physician relationships, reduced clinical autonomy and revised practice policies that prioritize profits, not patients.
Few Americans realize the breadth of corporate influence in healthcare today. Physicians, however, are increasingly concerned for their patients and the future of medicine. The Physicians Foundation’s 2024 Annual Survey found 7 in 10 physicians agreed that consolidation has a negative impact on patient access to high-quality, cost-efficient care. Similarly, a 2023 PAI survey of employed physicians found 67% had minimal to no input on practice management policies and decisions.
Physicians are now in a precarious position, caught between an ethical obligation to prioritize patient welfare and corporate mandates that often prioritize financial gain over patients’ health outcomes. For example, a PAI survey found 61% of employed physicians report facing restrictions on "out-of-network" referrals, and 45% report policies influencing or limiting drug prescribing decisions.
The challenges of healthcare corporatization are recent developments, but health insurers have been asserting controls over care decisions for decades. Profit-first strategies are embedded in insurers’ networks, which intentionally fail to include enough physicians for patients to easily obtain needed treatment. Payers’ cost-sharing structures complicate treatment and increase costs, often causing patients to delay or avoid needed care. Prior authorization requirements delay medical procedures and prescriptions, while “fail first” policies undermine physician decision-making by forcing patients to try less expensive medications before a physician-recommend drug is dispensed.
These strategies are used by insurers to generate billions in profit annually, often at patients’ expense. But the most concerning to date is health insurance companies’ rapid acquisition of physician practices and employment of physicians. As entities like UnitedHealthcare—now the largest employer of physicians in the U.S.—buy up the healthcare sector, they gain even more control over treatment options and costs to patients.
Turning back the clock on corporate ownership isn’t possible. However, safeguards are needed to protect medical decision-making from it. Physicians are not commodities. Patients are not just “consumers.” The public’s health demands greater transparency regarding practice ownership, greater regulation of new healthcare monopolies and standards for care that empower physicians to do what they do best and ensure clinical autonomy is free from profit-first policies.
Kelly Kenney is CEO of the Physicians Advocacy Institute and a principal at K2 Strategies. She is a healthcare attorney who previously held director roles at the American Medical Association.