U.S. Physician Groups Market Size, Share & COVID-19 Impact Analysis, By Number 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 (Primary Care, Pediatrics, OB/GYN, Ophthalmology, Orthopedics, Psychiatry, Cardiology, Dermatology, and Others), By Payor (Public Health Insurance and Private Health Insurance/Out-of-pocket), By Type (Single-specialty and Multi-specialty), and Forecasts, 2022-2029

The U.S. physician groups market size was valued at USD 271.41 billion in 2021. The market is anticipated to grow from USD 279.65 billion in 2022 to USD 360.47 billion by 2029, exhibiting a CAGR of 3.7% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with physician groups experiencing lower-than-anticipated demand across the U.S. compared to pre-pandemic levels. Based on our analysis, this market exhibited a decline of 1.6% in 2020 as compared to 2019.

The healthcare system consists of primary care doctors, family physicians, and specialists such as pediatricians, gynecologists, and anesthesiologists. Physician groups are healthcare providers, where more than two physicians work and provide care to patients to improve healthcare outcomes. These groups are generally classified as physician-owned and hospital-owned. A physician practicing privately or solo practitioner entails more financial risk than group practices owing to their relatively smaller patient base than others.

Moreover, various benefits associated with group practices over solo physician practice, such as increased financial security, special training, expertise, and job security, are some factors that tend to shift the solo practitioner toward larger groups. Additionally, owing to the increase in healthcare expenditure and the availability of adequate reimbursement policies, patients will opt for earlier treatment for various chronic diseases which will increase the demand for various groups of physicians to cater to a large patient pool, and thus support the market growth.   

Furthermore, the growth of the market can be primarily attributed to the burgeoning prevalence and incidence of various medical conditions. Additionally, the growing need for early diagnosis, management, and treatment among patients is leading to an increasing number of patient visits to physician offices in the country.

• According to the American Cancer Society, Inc., in 2022, an estimated 1.9 million new cancer cases are projected to be diagnosed in the U.S. Moreover, as per the American Cancer Society, an estimated 16.9 million patients suffering from cancer in the U.S. had sought treatment and survived by the end year of 2019. The number of cancer patient survivors is anticipated to rise to more than 22.1 million by the end of 2030. Thus, the rising patient population surges the demand for treatment, thus propelling market growth.

Moreover, the willingness of small groups of physicians to join larger groups for various benefits provided by larger groups coupled with increase in the number of acquisitions of a small group of physician practitioners by the hospitals and private-equity firms is anticipated to boost the market growth.

• For instance, 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

Temporary Halt in Various Surgical Procedures and Reduction in Patient Visits Hindered Market Growth 

The COVID-19 pandemic had a significant impact on the market in 2020. Various factors, such as decrease in patient volume & revenue among physicians and an increase in the expenses related to COVID-19, posed a challenge for the market growth in 2020.  

• For instance, as per the data published by the Physicians Foundation’s 2021 Survey of America’s Physicians, an estimated 32% of the physicians witnessed a reduction in staff, and about 42% of the physicians reported a reduction in revenue generation during the pandemic.

Additionally, physician-owned groups reported slow revenue growth as many small physicians’ groups left their practices and were employed by hospitals during the pandemic. Moreover, physician specialty services such as otolaryngology, cardiac surgery, and ophthalmology, along with various elective surgeries, were reduced during the COVID-19 pandemic, which directly impacted the market.

Furthermore, the market players such as Permanente Medical Group, and Ascension, and other players witnessed a decline in revenue generated during the pandemic. For instance, Ascension observed a decline of 3.9% in its patient service revenue in 2020 compared to 2019.

However, the market regained normalcy due to the rise in adoption of telehealth services by physicians and the gradual opening of hospitals & clinics after the ease of pandemic regulations. Additionally, the market players observed a substantial increase in their revenue and patient visits which contributed to the normal growth of the market post-pandemic.

• For instance, Select Medical Corporation witnessed 17.9% increase in its revenue in 2021 due to an increase in visits, which increased 21.1% to 9,193,624 for the year ended December 31, 2021 compared to the previous year.


• In addition, Optum, Inc. division Optum Health witnessed an estimated 35.8% increase in its revenue in 2021 as compared to the previous year.

LATEST TRENDS

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Rising Preference Shift from Large Physician Groups towards Small Physician Groups 

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 smaller 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, as per the recently published data by the American Medical Association (AMA), the share of small groups consisting of 10 or fewer physicians has dropped continuously from 61.4% in 2012 to 53.7% in 2020.

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

DRIVING FACTORS

Shifting Focus of Market Players toward Inorganic Growth Strategies to Drive Market Growth

Over the past few years, there has been a steep increase in mergers and acquisitions of physician groups. The high workload, high administrative cost, and less financial stability faced by the physicians working in small groups tend to merge them with larger groups. Furthermore, the rising focus of larger groups of physicians to increase and expand their services throughout the U.S. led to high numbers of mergers and acquisitions.

• For instance, in October 2022, Gastro Health partnered with Springfield Gastroenterology. Springfield Gastroenterology is joining with three physicians and one advanced practice provider. The company aimed to provide excellent care and personal attention through this partnership.


• Additionally, in September 2021, Intermountain Healthcare and SCL Health, two non-profit healthcare organizations, merged and created a model of health systems for providing services in six states such as Colorado, Montana, Kansas, Idaho, Nevada, and Utah.

Furthermore, private-equity firms investing heavily to acquire various smaller physician practices to provide financial security through partnerships are anticipated to bolster the market.

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

The physicians who are practicing independently are seeking to join larger groups, which positively contributes to market growth. Cost-effectiveness is one of the major factors that has increased the number of solo practitioners joining the larger U.S. groups of physicians. The HITECH Act, which creates incentives related to healthcare 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 for solo practitioners.

• For instance, according to the study conducted by the Physicians Advocacy Institute in collaboration with Avalere Health, the number of physicians employed by the hospital or corporate-owned practices was 484,100 in January 2022 compared to 375,400 in 2019 and witnessed an increase of 28.9%. Thus, solo practitioners are declining rapidly due to increased employment of physicians in hospitals and corporate entities.

Hence, the acquisition of independent practices by hospital and corporate-owned groups and shifting focus to join larger groups are expected to drive the market growth in the coming years.

RESTRAINING FACTORS

Surge in Employment of Physicians by Hospitals to Restrain Market Growth

Numerous physicians are struggling to maintain their groups and opt for hospital employment. Hospital employment has various advantages such as a reduction in the cost of 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 June 2021, about 70% of U.S. physicians were employed by hospitals or corporate entities.

Moreover, policies, such as Health Care Financing Administration (HCFA) allowing hospitals to treat acquired physician practice as either provider-based or free-standing, increase physicians joining hospitals.

Thus, with increasing physician employment by hospitals, the number of physicians working in the groups is expected to decrease, thereby hampering the U.S. physician groups market growth.

SEGMENTATION

By Number of Physicians Analysis

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2 to 10 Physicians Segment to Hold a Dominant Market Share owing to Preference among Traditional Physicians to Work in Solo Practice

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

The 2 to 10 segment accounted for the largest part in the U.S. physician groups market share in 2021 and is estimated to dominate the market during the forecast period. Traditional physicians who are over 40 and are more likely to work in small practices are anticipated to drive the market. Moreover, physicians who preferably don’t want to change their groups due to their desire to work autonomously or in small groups.

• For instance, according to a report published by California Health Care Foundation in March 2022, an estimated 57.6% of physicians were working in 2 to 10 groups. 

Furthermore, the more than 50 segment is anticipated to grow at a significant CAGR during the forecast period. Various benefits, such as financial security, improved quality of care, and fewer administration costs, led physicians to join larger groups. In addition, the increasing focus of the larger groups operating in the market toward acquisitions and mergers with the other smaller groups also boosts segmental growth.

On the other hand, the 11 to 24 and 25 to 50 segments are anticipated to have considerable growth owing to the preferential shift of health physicians to working for large groups due to distinct advantages such as fewer working hours, less workload, improved quality of patient care, and others.

By Ownership Analysis

Hospital-owned Segment to Witness Highest Growth Due to Increasing Acquisitions of Physician Practices by Hospitals

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

The hospital-owned segment is anticipated to witness the highest CAGR over 2022-2029. Over the years, hospitals have increased their ownership stake in the U.S. physician groups. Also, there has been an increase in acquiring physician practices during the pandemic, as physicians struggled to maintain groups, which boosted the segmental market growth.

• In April 2022, a report published by Avalere Health reported that the percentage of hospital-owned practices increased between 28% and 44%, respectively.

On the other hand, the physician-owned segment will exhibit considerable growth during the forecast period owing to physicians' struggle to maintain their practices due to administrative burden and shift toward hospital-owned groups of physicians.

By Specialty Analysis

Growing Demand for Chronic and Acute Care to Boost the Growth for Primary Care Segment

Based on specialty, the market is categorized into primary care, pediatrics, OB/GYN, ophthalmology, orthopedics, psychiatry, cardiology, dermatology, and others.

The primary care segment accounted for the largest market share in 2021, and is anticipated to observe nominal growth in the forthcoming years. The rising burden of chronic and acute diseases and the higher demand among patients for various primary care facilities such as family medicine, general internal medicine, and others for early detection and proper management of the disorders are anticipated to propel the market growth. Additionally, the rising number of primary physician care in the country to meet the growing demand for these practitioners bolsters market growth.

• For instance, according to the Health Resource & Service Administration (HRSA), in 2018, there were an estimated 105,400 family physicians and 81,760 general internal physicians, projected to increase by 6% and 13% by 2030.

Additionally, OB/GYN segment is expected to grow at the highest rate during the forecast period. The growing number of OB/GYN associated disorders among the women such as endometriosis, reproductive health disorders, infertility, and others, the increase in the old aged women population in the U.S., the rise in pregnancy rate, and the growing patient visits for proper management of the disorders are expected to promote the segmental growth.

On the other hand, the ophthalmology specialty segment is projected to grow at the second-highest CAGR in the upcoming years due to an increase in the prevalence of various ophthalmic disorders in the country and a rise in patient visits for a regular eye check-ups and various ophthalmic surgeries, among others, augment the segmental growth.

• For instance, according to a 2020 article published by the American Academy of Ophthalmology (AAO), glaucoma affects more than 2.7 million Americans aged 40 years and older.


• Similarly, according to 2021 published by Optometric Physician, the estimated global population with primary angle-closure glaucoma (PACG) in 2020 is 17.14 million among the population aged 40 years and above. The number is projected to rise to around 26.3 million by 2050.

By Payor Analysis

Private Health Insurance/Out-of-pocket Continue to Dominate 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 the study period and is predicted to record a significant CAGR from 2022 to 2029. The increasing adoption of private health insurance in the country         owing to comprehensive health plans is one of the predominant factors contributing to the market growth. Moreover, benefits such as no waiting period, coverage of pre-existing illnesses, and others also bolster the market growth.

• For instance, according to data published by the U.S. Census Bureau, in 2021, 66.0% of the U.S. population was covered by private health insurance, and about 35.7% were insured by public health insurance. Thus, private insurance coverage was more prevalent than public coverage in the country.

Moreover, the availability of public insurance at a considerably lower price for physician services than private health insurance and broad coverage of healthcare costs in public insurance policies make public insurance affordable for low-income and middle-class families and individuals, fueling the segmental growth in the forthcoming years.

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 accounted for the largest market share in 2021 and is expected to witness the highest CAGR between 2022 and 2029. The high-quality care at lower cost offered by groups with multi-specialty facilities and a preferential shift among solo practitioners due to distinct advantages in multi-specialty services, such as providing greater financial stability, are the factors supporting the growth of the market in the country. Along with these factors, lower administration pressure, improved quality care to patients, and less workload are also contributing to the segment's growth.

• For instance, in July 2022, Northwell Health opened a multi-specialty physician group medical practice in Yonkers dedicated to cardiology and primary care to fulfill patients' requirements.

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

KEY INDUSTRY PLAYERS

Companies with Largest Physician Groups to Dominate the Market 

The market is extremely fragmented owing to the presence of many large and small groups operating in the market. However, Permanente Medical Group, Inc., Optum, Inc., and Ascension, constitute about 60.0% of the total market in 2021, with Permanente Medical Group, Inc. contributing about 34.3%. The company's dominance is attributed to the various strategic business activities it indulged in to expand and strengthen its market position.

• In October 2021, The Permanente Medical Group, Inc., launched Advanced Care at Home for patients to receive acute-level care and recovery services at the comfort and convenience of their homes.

Additionally, Optum, Inc. held the second-largest market share in the total market. The company is actively expanding its services and strengthening its brand presence through various collaborations, mergers & acquisitions, and others.

• For instance, in October 2022, Optum, Inc. collaborated with Change Healthcare to connect and simplify the core clinical, payment, and administrative processes that healthcare providers and payers depend on to serve patients. The collaboration aims to increase efficiency and reduce the cost of the services.

Other key players, such as Mayo Foundation for Medical Education and Research (MFMER), Beaumont Health, Brigham and Women's Hospital, and Advocate Aurora Health, held a moderate market share owing to diversified services, an established network, establishment of new facilities, and a strong focus on acquisitions and mergers.

LIST OF KEY COMPANIES PROFILED:

• The Permanente Medical Group (U.S.)


• Optum, Inc. (U.S.)


• Brigham and Women’s Hospital (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.)


• Advocate Aurora Health (U.S.)


• NYU Langone Hospitals (U.S.)                                                                                

KEY INDUSTRY DEVELOPMENTS:

• December 2022 - Advocate Aurora Health collaborated with Atrium Health to improve safety and outcomes and advance health equity.


• November 2022 - Northwell Health opened a USD 10 million multidisciplinary clinic in Bay Shore to focus on patients for musculoskeletal care and rehabilitative services.


• November 2022 - Mayo Foundation for Medical Education and Research (MFMER) announced the addition of physicians to increase the provision of services among patients.


• October 2022 - Cleveland Clinic affiliated with Holzer Center for Cancer Care to expand access to highly specialized cancer treatments in West Virginia.


• August 2022 - Cleveland Clinic expanded radiology services, with Cleveland Clinic Imaging Institute intending to expand access to radiology services.


• January 2020 - Northwell Health acquired Queens Medical Associates, aiming to expand its oncology network in New York, U.S. This acquisition has helped increase the company's brand presence and broaden its services.

REPORT COVERAGE

An Infographic Representation of U.S. Physician Groups Market

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The global U.S. physician groups research report provides a detailed market analysis. It focuses on key aspects such as leading physician group and their market analysis, types of specialties, competitive landscape of the key players, 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 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