From hospital systems to private equity, eight healthcare leaders joined Becker’s to discuss who they believe is the most disruptive force in physician consolidation today.
Editor’s note: These responses were edited lightly for clarity or brevity.
Question: Who’s the most disruptive player in physician consolidation today?
Frank DiMaio, MD. Chairman of Musculoskeletal Service Line at Catholic Health (Buffalo, N.Y.): Large integrated healthcare systems remain the most disruptive force in small practice consolidation, especially in states where overhead costs and taxes remain unaffordable.
Daniel Decker, MD. Urologist in Mountain House, Ark. The most disruptive player in physician consolidation today is arguably the hospital employment model. While this model was initially seen as a solution to the challenges faced by physicians in private practice, it has proven to be short-sighted and detrimental to the overall synergy and effectiveness of healthcare delivery.
Hospital employment often leads to a loss of autonomy for physicians, who may find themselves more focused on meeting the administrative demands of the hospital rather than prioritizing patient care. Hospitals (despite many with “nonprofit” designation) prioritize financial gain. This shift can create a disconnect between physicians and their patients, undermining the patient-physician relationship.
Moreover, the consolidation of physicians under hospital employment can stifle innovation and collaboration among healthcare providers. When physicians are employed by hospitals, they may be less inclined to collaborate with independent practices or other healthcare entities, leading to a fragmented healthcare system. This lack of synergy can hinder the development of integrated, collaborative care models that are essential for improving patient outcomes and reducing costs.
Hospital employment models may seem like a viable solution for physician consolidation, but they are ultimately disruptive and counterproductive. The financial pressures associated with hospital employment can lead to a focus on volume over value, as hospitals often prioritize procedures and services that generate revenue. This can result in unnecessary treatments and a lack of emphasis on preventive care, ultimately harming patients and detrimental to the healthcare system as a whole. In my opinion, physicians need to reverse the passive trend currently moving towards hospital employment, and take a proactive consolidating lead in healthcare delivery.
Joseph Lamplot, MD. Sports Medicine and Shoulder Surgeon and of Sports Medicine Research at Endeavor Health (Memphis, Tenn.): Physician’s fear of losing autonomy. Physician consolidation will inevitably continue due to rising costs of practice and declining reimbursements relative to inflation. There are several modes of consolidation, and ultimately nearly all of them result in a loss of physician autonomy to varying extents. As such, the desire for autonomy conflicts with physician consolidation. Newly trained physicians and early career physicians considering job changes often fear the current and potential role of private equity and for-profit organizations when considering prospective practices. While private practice remains the best way to preserve physician autonomy, consolidation is leading to larger, more powerful groups but often with a more corporate and less physician-centered governance structure. I believe that the next generation of physicians will gravitate toward practices in which some semblance of physician autonomy is maintained, personal financial risk is mitigated, and work-life balance is supported.
Christina Menor, MD. President of California Society of Anesthesiologists (Pasadena): Disruption, by definition, is a radical change to an industry usually through technology and innovation. Unfortunately, this can be a positive or negative disruption in many ways. Physician consolidation has occurred through insurance giants like United Healthcare with Optum but also through private equity firms, hospital based systems like Sutter and Kaiser, and technology and artificial intelligence with optimization and increased efficiencies independent practices. The pressure financially in the corporate medical arena often far outweighs the benefit and priority being the patient in the relationship. Optum has blasted through this with its overarching United Healthcare umbrella and is probably the most disruptive in physician consolidation at this time.
Bethwel Raore, MD. Neurosurgeon at Apex Spine and Neurosurgery (Duluth, Ga.): I believe the most disruptive force in physician consolidation today is the rise of private equity. Their aggressive acquisition strategies and emphasis on short-term profitability are fundamentally reshaping the healthcare landscape — often prioritizing financial performance over long-term clinical value.
Mark Sczepanski, MD. Ophthalmologist in Grand Forks, N.D.: In my view, the most disruptive force in physician consolidation right now isn’t a company — it’s the macroeconomic environment. Specifically, high interest rates and the rising cost of capital have significantly cooled private equity activity, particularly in specialties like ophthalmology. The economics of leveraged buyouts have become less attractive, and many deals that might have made sense two years ago are no longer viable.
Maria Tam Teresa, MD. OB-GYN in Chicago: Large healthcare systems are disruptors in the healthcare industry due to their ability to significantly alter traditional healthcare delivery models and market dynamics. Their extensive networks can disrupt smaller providers who cannot compete on price. Additionally, their size and reach give them significant negotiating power with insurers and suppliers, influencing pricing and contract terms in ways that smaller entities cannot. Through mergers and acquisitions, they expand their reach and consolidate market share, increasing competition and pressuring smaller providers to assimilate or collaborate.
Allyn Wilcock, CRNA. Owner of Advanced Anesthesia Services and Northwest Healing and Wellness (Snoqualmie, Wash.): PE firms such as Bain Capital are betting big on ASCs, seeing the financial potential as surgeries continue to move to outpatient settings. While Optum is a giant corporation, it operates much like a PE firm, buying out more and more independent practices and surgery centers across the country. Independent ASCs can survive this upheaval if they have strict financial and accounting standards and a value proposition to draw patients and surgeons to their facilities. Partnering with an outpatient-focused anesthesia group, focused on quick, outcomes-focused care, can improve both finances and the value proposition independent ASCs bring to the table and set them apart in this world of corporate healthcare.
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