Rural America Loses Independent Physicians and Practices at Alarming Rate, Report Finds

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What You Should Know: 

– A new report commissioned by the Physicians Advocacy Institute (PAI) and conducted by Avalere reveals a significant decline in the number of independent physicians and medical practices in rural areas of the United States between January 2019 and January 2024. 

– The report raises concerns about reduced access to care, rising costs, and a decline in care quality for rural communities.

Report Background/Methodology

The analysis used data from the IQVIA OneKey database, which includes physician and practice location information, as well as hospital/health system ownership data from January 2019 through January 2024. Rural areas were defined using the Health Resources and Services Administration’s Federal Office of Rural Health Policy crosswalk.

Corporatization of Healthcare Challenges

The report suggests that the decline of independent physicians and the increasing corporatization of healthcare in rural areas pose significant challenges:

Reduced Access: The closure of practices and loss of physicians can limit access to care, particularly for patients in underserved areas.Rising Costs: Policymakers have voiced concerns that consolidation in the healthcare industry can drive up costs for patients.Worsening Care Quality: There are concerns that corporate influence may prioritize profits over patient care, potentially impacting the quality of services.

Other key findings of the report include: 

– Loss of Physicians: Rural areas experienced a net loss of nearly 2,500 physicians, representing a 5% decrease in the total number of practicing physicians in these regions.

– Practice Closures: Nearly 3,300 rural medical practices closed during the five-year period. This translates to an 11% reduction in overall access to medical practices for rural residents.

– Sharp Decline in Independent Physicians: The number of independent physicians in rural areas plummeted by 43%, decreasing from 21,956 in 2019 to just 12,467 at the start of 2024.

– Independent Practice Closures/Acquisitions: Over 40% of independent medical practices either closed or were acquired by hospitals, health systems, or other corporate entities.

– Surge in Corporate Influence: Corporate entities significantly expanded their presence in rural healthcare, nearly doubling their ownership of practices and employing 57% more physicians compared to 2019.

– Dominance of Non-Physician Ownership: By January 2024, 76% of rural physicians were employed by hospitals, health systems, or corporate entities, and 61% of all rural medical practices were owned by non-physicians.

Midwest & Northeast Regional Impact

The report notes that the Midwest and Northeast were particularly affected by the loss of independent physicians. Ten states experienced a loss of over 50% of their independent physicians:

IndianaIowaMaineMassachusettsMinnesotaNew HampshireNew JerseyOhioSouth CarolinaSouth Dakota

“Small, independent practices have been the cornerstone of medical care for many people in rural areas,” said Kelly Kenney, chief executive officer of PAI. “We’ve seen with rural hospitals that corporate acquisitions often lead to closures. We are concerned that this same profit-first approach will cause corporate owners to shutter rural practices that don’t produce high enough revenues, leaving patients without the access to care they need.”