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Large corporations buying up primary care practices at rapid pace

Some worry the consolidation will shift the focus from patient care to corporate profits.
Large corporations buying up primary care practices at rapid pace
Posted at 12:54 PM, Jun 07, 2023

Since the pandemic, primary care physicians have been leaving the industry in droves.

According to Definitive Healthcare, in 2021, 117,000 physicians left the workforce, followed by nurse practitioners, with 53,295 departures, and physician assistants, with 22,704.

The exodus has led more private corporations and hospital systems to buy the practices of the remaining doctors, promising more money for their grueling work.

On May 2, CVS Health finalized its acquisition of Oak Street Health for $10.6 billion. The purchase adds doctors in 21 states to CVS Health's roster of more than 40,000 physicians, pharmacists and nurse practitioners, according to the company. Earlier in February, Amazon purchased One Medical for $4 billion.

Such moves have led to where we are today, as 70% of physicians in our country are employed by hospital systems and corporate entities, according to the Physicians Advocacy Institute. 

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"It's designed to turn primary care practices into financial engines to generate profits for the venture capitalists in many cases," said Bob Berenson, a fellow with the Health Policy Center at the Urban Institute, a nonpartisan think tank in D.C.

Berenson says he is against the consolidation as he worries it shifts the focus of care from patients to profits, incentivizing practitioners to see more patients in a shorter amount of time, and eroding trust in the health care system.

"Trust is an essential part of what health care should be all about," said Berenson. "And I don't think we want a system where patients are always questioning whether the physician or other clinician is acting in their best interest or is just trying to turn a profit."

Paul Reynolds is a certified family nurse practitioner in Denver. He opened his practice, Daily Apple Clinic, in early 2023 and wonders if his industry as a whole is more concerned with patient outcomes or profits as he has seen other practices get gobbled up by larger corporations.

"If I'm not trying to help these people live their best lives, what's my point?" said Reynolds. "Every medical provider on the planet, that should be their main goal, but it's not."

Scripps News reached out to four major health care providers for their take on the issue — Optum, CVS Health, Amazon and VillageMD — but has not heard back from any of them.

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In CVS Health's announcement about its acquisition of Oak Street Health, CVS says it will improve outcomes and reduce costs for patients, but both Berenson and Reynolds remain skeptical. 

"What you've done when you put the hospitals and doctors together into a business entity — they then have enough economic clout to drive higher prices from insurers," said Berenson.

"The goal [of these corporations] is to reduce expenses, cut costs and increase the amount of money that comes in," added Reynolds. "Again, that's what margin is, so the goal is just to improve that. So, they're really only going to be motivated to do that to the level of care that's required or that seems to be adequate."

It may be too soon to determine whether this will detract from quality of care, but both smaller practices and experts alike warn it conflicts interests in an industry that's supposed to be based on virtue.

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