Hospital- And Private Equity–Affiliated Specialty Physicians Negotiate Higher Prices Than Independent Physicians

Hospital and private equity (PE) consolidation in health care is altering the physician practice landscape, with more than three-quarters of physicians employed by these corporate entities as of 2023. We examined practice affiliation patterns for specialist physicians and those patterns' association with commercial prices for cardiology and gastroenterology services. We found that in 2023, the majority of specialists (approximately 72 percent of cardiologists and 57 percent of gastroenterologists) were employed by hospitals, whereas PE-affiliated specialists constituted a lower share and were concentrated in certain geographic regions. Hospital-affiliated specialists negotiated prices that were 16.3 percent higher for cardiology procedures and 20.7 percent higher for gastroenterology procedures compared with specialists in independent practices. PE-affiliated specialists negotiated prices that were 6.0 percent higher for cardiology and 10.0 percent higher for gastroenterology procedures. If hospital- and PE-affiliated specialists charged prices equivalent to those of independent practices, commercial health care spending would decrease by approximately $2.9 billion and $156 million, respectively. As corporate consolidation of physician practices continues to accelerate, greater antitrust enforcement and enhanced transparency in ownership structures and pricing will be essential tools for policy makers to use in containing health care costs while preserving patients' access to high-quality specialty care.