Geographic Variation in the Consolidation of Physicians into Health Systems, 2016–18
U.S. Department of Health and Human Services, Agency for Healthcare Research and Quality
- Physician consolidation into health systems increased in nearly all (92 percent) metropolitan statistical areas (MSAs) from 2016 to 2018.
- Consolidation was particularly strong in the Midwest and Northeast.
- The largest increases occurred in small to midsized MSAs, and markets with the most growth in consolidation tended to have sizeable increases in consolidation within the largest system.
Consolidation of physicians into vertically integrated health systems has increased in recent years. Few studies have examined geographic variation in physician consolidation into health systems, which is important since consolidation among health care providers tends to lead to higher prices. Using the AHRQ Compendium of U.S. Health Systems, we found that of the 382 MSAs, 113 had more than half of physicians in health systems in 2018, and most of those 113 MSAs were in the Midwest or Northeast. Physician consolidation increased in nearly all (92 percent) MSAs from 2016 to 2018. One-third of MSAs (127) had increases of greater than 10 percentage points in the share of physicians in systems, and 61 MSAs had increases of greater than 10 percentage points in the share of physicians in the largest system in the MSA. The largest increases in physician consolidation occurred in small to mid-sized MSAs.
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