U.S. Physician Groups Market Size, Share & COVID-19 Impact Analysis, By No. of Physicians (2 to 10, 11 to 24, 25 to 50, and More than 50), By Ownership (Physician-owned, Hospital-owned, and Others), By Specialty (Family Practice, General Internal Medicine, Pediatrics, Radiology, OB/GYN, Emergency Medicine, and Others), By Payor (Public Health Insurance, Private Health Insurance/Out-of-pocket), By Type (Single-specialty and Multi-specialty), and Forecast, 2021-2028

The U.S. physician groups market was valued at USD 249.80 billion in 2020. The market is projected to grow from USD 251.75 billion in 2021 to USD 287.57 billion by 2028 at a CAGR of 1.9% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with the witnessing a negative impact on across all the U.S. states amid the pandemic. Based on our analysis, the U.S. market exhibited a decline of -3.9% in 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over. 

The healthcare system consists of primary care doctors, family physicians, and specialists such as pediatricians, gynecologists, and anesthesiologists. Physician groups are healthcare providers, wherein more than two physicians work and provide care to patients with the purpose of improving healthcare outcomes. They are generally physician-owned and hospital-owned. In physician-owned groups, physicians provide several specialized services and divide the income in a manner previously agreed upon by the group. Physicians working in a group experience the benefits of built-in on-call coverage, access to more income, and shorter work hours as compared to solo practioners.   

The typical specialties served in the physician groups include family practice, pediatrics, general internal medicine, radiology, OB/GYN, and emergency medicine.

The U.S. physician groups market growth can be attributed to the rising occurrence and prevalence of various medical conditions requiring treatment from these groups. Furthermore, solo practitioners seeking to join such groups contribute to the market growth. Additionally, increasing acquisitions of physician groups by the hospitals and private-equity firms boost the market growth.

• For instance, according to the press releases by Northwell Health, in January 2020, Northwell Health acquired Queens Medical Associates (QMA), a physician practice and infusion center, to expand its oncology practice in New York City, U.S.

COVID-19 IMPACT

COVID-19 Pandemic Hampered Market Revenue Due to Declining Patient Volume

The COVID-19 pandemic had a significant impact on the market during 2020. Factors such as decrease in patient volume & revenue of physician groups and increase in the expenses related to COVID-19 posed a challenge for the market growth in 2020.

• For instance, according to a survey conducted by MGMA (Medical Group Management Association), in 2020, 97% of physician practices have experienced a negative financial impact directly or indirectly due to COVID-19.

Additionally, smaller physician-owned groups also reported steep decline in revenues, which is expected to take a long time for its recovery. Thus, many small physicians’ groups left their practices and were employed by hospitals during the pandemic. Moreover, some physician specialty services such as otolaryngology, cardiac surgery, and ophthalmology were reduced in the COVID-19 pandemic.

• For instance, as per the research published by American Medical Association, in 2020, there was an abrupt decrease in otolaryngology cases volume as elective surgeries were not allowed during the COVID-19 pandemic.

The U.S. physician groups market players witnessed a significant decline in revenue generated during 2020. For instance, Beaumont Health witnessed a decrease of 2.6% in revenue during FY 2020. The revenue decreased from USD 4,702.4 million in 2019 to USD 4,580.0 million in 2020.

The COVID-19 pandemic has negatively affected Beaumont Health’s inpatient discharges, observations, births, emergency visits, surgeries and physician encounters. However, the revenue decline due to pandemic was recovered by the CAREs Act provider relief funds.

LATEST TRENDS

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Small Physician Groups Moving into Larger Groups to Favor Market Growth

Over the past few years in the U.S. physicians have been moving from smaller to larger group practices. This is driven by various factors, including significant financial and technical challenges in running small physician groups and increasing preference for younger physicians to work in larger groups. According to the findings published by the Annals of Internal Medicine, more physicians are entering large practices and leaving small group practices.

• For instance, according to the Physicians Advocacy Institute and Avalere Health, between 2016 and 2018, hospitals acquired 8,000 medical practices, and 14,000 physicians left private practice to work in hospitals in the U.S.

This shift of the smaller physician groups into larger groups is expected to lead to better patient care and lower costs, thereby spurring the market growth. Moreover, large physician groups have better administrative support, which influences more physicians to move toward large groups.    

DRIVING FACTORS

Increasing Focus of Market Players on Mergers and Acquisitions to Drive Market Growth

Over the past few years, there is an increase in mergers and acquisitions of physician groups. This is attributed to the increasing operational and administrative costs. Hence, to reduce the administrative burden on physicians, small physician groups tend to join larger groups.

• For instance, in September 2021, Intermountain Healthcare and SCL Health, two non-profit healthcare organizations, announced to merge and create a model of health systems for providing services in six states such as Colorado, Montana, Kansas, Idaho, Nevada, and Utah.


• Furthermore, in January 2021, ProMedica Central Physicians, an affiliate of ProMedica Health System, Inc., acquired Toledo Orthopedic Surgeons.

Furthermore, private equity firms also focus on investments, resulting in positive care physicians market size for physicians and private equity firms. They invest in specialties such as orthopedic, urology, ophthalmology, and gastroenterology. Moreover, due to the pandemic, many physician groups were affected and seeked new financial security partnerships with other players in the market.

Increasing Inclination of Solo Practitioners to Join Physician Groups Drives Market Growth

The physicians practicing independently are seeking to join these groups which positively contributes to market growth. Cost-effectiveness is one of the major factors that has increased the number of solo practioners joining the U.S. physician groups. The HITECH Act, which creates incentives related to health care information technology, includes electronic health record (EHR) systems among providers. With this HITECH Act, it is more practical for a larger group to have multiple physicians maintain an EHR system than it is for the solo practitioner.

• For instance, according to the study conducted by the Physicians Advocacy Institute in collaboration with Avalere Health, between 2019 to 2020, hospitals and other corporate firms acquired 20,900 additional physician practices, which resulted in a 25% increase in corporate-owned practices over .wo years

Hence, the acquisition of independent practices by the hospital and corporate-owned groups is expected to drive the market growth in the coming years.

RESTRAINING FACTORS

Surge in Physician Employment by Hospitals to Restrain Market Growth

A large number of physicians are struggling to maintain their groups and opt for hospital employment. Hospital employment has various advantages such as reduction in the cost for support services, no administrative burden, and financial stability. These advantages are expected to increase the number of employed physicians across the globe.

• For instance, according to the recently published data by the Physicians Advocacy Institute, in January 2021, around 60% of all physicians in the Midwest region of the U.S. are employed by hospitals. Moreover, approximately half of the Northeast and West region physicians are employed by hospitals.

Moreover, hospitals have been investing in hospital physicians due to various benefits such as better monitoring of cost and efficient coordination with other providers for improved patient care.

Thus, with increasing physician employment by hospitals, the number of physicians working in these groups is expected to decrease over 2021-2028.

SEGMENTATION

By No. of Physicians Analysis

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More than 50 Physicians Segment to Hold a Dominant Market Share During Forecast Timeframe

Based on the number of physicians, the market share is segregated into 2 to 10, 11 to 24, 25 to 50, and more than 50.

The more than 50 segment captured the largest share of the U.S. market during 2020 and will continue to dominate over 2021-2028. The dominance of this segment is attributable to growing mergers and acquisitions.

• For instance, according to news published by Healthcare Finance, in January 2019, Cleveland clinic acquired Indian River Medical Center and Martin Health System. These two deals would broaden Cleveland Clinic's presence in Florida.

The 11 to 24 segment held the second-largest market share in 2020 and is predicted to record a moderate CAGR. Meanwhile, the 25 to 50 segment is estimated to witness a substantial CAGR between 2021 and 2028.

The 2 to 10 segment will experience a low CAGR over the projected timeframe due to small physicians groups seeking to join larger physician groups due to the struggle in maintaining groups during COVID-19.

By Ownership Analysis

Physician-owned Segment to Dominate Market Due to Increasing Focus of Solo Practioners Toward Reducing Administration Burden

Based on ownership, the market share is split into hospital-owned, physician-owned, and others.

The hospital-owned segment is anticipated to witness the highest CAGR over 2021-2028. Over the years, hospitals have increased their ownership stake in these groups. There has been an increase in acquiring physician practices during a pandemic, as physicians struggled to maintain groups, which boosted the market share of this segment in 2020.

• For instance, according to an article published by Industry Dive in June 2021, hospitals employed 44% of physicians in 2018, and it was estimated that by 2021, that figure increased to 49.3%.

The physician-owned segment will grow at a lower CAGR during 2021-2028 owing to physicians' struggle to maintain their practices due to administrative burden and shift towards hospital-owned physician groups.

By Specialty Analysis

Technological Advancements to Boost the Growth of Radiology Segment

Based on specialty, the market share is broken down into family practice, general internal medicine, pediatrics, radiology, OB/GYN, emergency medicine, and others.

The radiology segment will grow at the highest CAGR over 2021-2028. The primary factors fueling the growth of radiology segment include rising geriatric population, rising cancer occurence, technological advancements, and greater patient flows resulting from the Affordable Care Act.

• For instance, as per the article published by Innovate Healthcare, the U.S. witnessed the second-highest number of imaging exams during 2018. The country also had the second-highest rate of MRI and CT technology utilization.

Thus, these factors are expected to drive market growth in future.

The general internal medicine segment is predicted to record a notable CAGR during 2021-2028, led by the rising number of primary care practices and significant increase in the demand for internal medicine physicians during the pandemic to provide front-line treatment to COVID-19 patients.

By Payor Analysis

Private Health Insurance/Out-of-pocket Continue Dominance Due to Better Health Plans

Based on payor, the market is segmented into public health insurance and private health insurance/out-of-pocket.

The private health insurance/out-of-pocket segment dominated the market share during 2020 and is predicted to record a notable CAGR from 2021 to 2028. This segment dominates the market share owing to comprehensive health plans. Besides, private health insurance/out-of-pocket segment is spending more on physician services.

• For instance, according to the article published by KAISER FAMILY FOUNDATION, in April 2020, private insurance accounted for more than 40% of expenditures on physician services in 2018.

The public health insurance/out-of-pocket segment will record the CAGR over 2021-2028. The growth of this segment is attributed to the low Medicare payment for physician services, which is favorable for low-income families and individuals.

By Type Analysis

Benefits Associated with Multi-Specialty Segment to Drive the Segment

Based on type, the market share is bifurcated into single-specialty and multi-specialty.

The multi-specialty segment held the dominant share of the market during 2020 and will witness the highest CAGR between 2021 and 2028. This segment's large share and high growth rate are attributed to lower costs and higher quality of care. Moreover, the increasing number of general surgeries and the rising number of patients in specialties such as family medicine and internal medicine are expected to boost the segment in the coming years.

• For instance, according to the data from the American Medical Association’s (AMA) Physician Practice Benchmark Surveys, the share of physicians in multi-specialty practice was at its highest (between 30 to 34%) in general surgery, general internal medicine, and family medicine.

The single-specialty segment will experience a moderate CAGR in the projected period due to decreased patient volume, reduction in the patient visits, and financial instability of the single-specialty U.S. physician groups.

KEY INDUSTRY PLAYERS

Companies with the Largest Physicians Groups to Dominate the Market

The market is extremely fragmented due to the presence of various physician groups. However, market players such as the Permanente Medical Group, Cleveland Clinic, HealthCare Partners IPA, Ascension, and Northwell Health account for a substantial share of the market.

These players are considered as some of the major companies operating in this market due to many physician groups, diversified services, an established network, establishment of new facilities, and a strong focus on acquisitions and mergers.

• For instance, as per the news published by Patch Media, in October 2021, Ascension Medical Group announced to open a new clinic in Georgetown that provides primary care services.

Other market players, such as Mayo Foundation for Medical Education and Research (MFMER), Beaumont Health, Brigham and Women’s Hospital, Advocate Aurora Health, and NYU Langone Hospitals held moderate market shares attributed to their presence in the U.S. Furthermore, diversified services provided by physician groups are expected to gain market shares in the coming years. 

LIST OF KEY COMPANIES PROFILED:

• The Permanente Medical Group (U.S.)


• Cleveland Clinic (U.S.)


• HealthCare Partners IPA (U.S.)


• Ascension (U.S.)


• Northwell Health (U.S.)


• Mayo Foundation for Medical Education and Research (MFMER) (U.S.)


• Beaumont Health (U.S.)


• Brigham and Women’s Hospital (U.S.)


• Advocate Aurora Health (U.S.)


• NYU Langone Hospitals (U.S.)                                                                                        

KEY INDUSTRY DEVELOPMENTS:

• February 2021 – HealthCare Partners (HCP) announced a partnership with AposHealth to bring an innovative, non-invasive treatment for knee osteoarthritis currently offered to its members directly into their homes through telehealth.


• October 2021 - NYU Langone Hospitals expanded services at health care facilities located in New York as part of its strategic plan to create an extensive healthcare network.

REPORT COVERAGE

An Infographic Representation of U.S. Physician Groups Market

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The U.S. physician groups market research report provides a detailed market analysis. It focuses on key aspects, such as leading group and their market analysis, types of specialties, and the comparative analysis of the average cost of key services. Besides this, it offers insights into the market trends and highlights key industry developments. The report further includes the reimbursement & regulatory overview, number of physician groups by state, prevalence/incidence of key medical conditions, and COVID-19 impact analysis on the primary care physicians market and specialty care physicians market.

Report Scope & Segmentation