U.S. Physician Groups Market Size, Share, & Trends Analysis Report By Practice Type (Single Specialty Group, Multi-specialty Group), By Practice Size, By Ownership, By Region, And Segment Forecasts, 2024 - 2030

U.S. Physician Groups Market Size & Trends

The U.S. physician groups market size was estimated at USD 324.85 billion in 2023 and is expected to grow at a CAGR of 5.14% from 2024 to 2030. The market is expected to grow significantly, driven by government initiatives to improve revenue for physician groups, a shift towards value-based care models, and the growing trend of solo practitioners opting to join large physician groups. Recently, physicians have shifted towards large healthcare organizations from self-employed or part of small practices.

Physicians are shifting from solo practices to more secure group practices owing to administrative and financial difficulties with the operation of a practice. Solo practicing involves managing various administrative tasks, such as billing, coding, insurance claims, and compliance with healthcare regulations. This administrative burden can be overwhelming for a single practitioner, leading to increased stress and reduced time for patient care. According to the American Medical Association’s Physician Practice Benchmark Survey, the number of physicians working in private practices decreased by around 13% between 2012 and 2022.

The transition from fee-for-service reimbursement models to value-based care models continues to fuel the expansion of physician groups. These models incentivize healthcare providers to deliver top-notch care and achieve better patient outcomes, fostering collaboration and coordination within physician groups. For instance, in May 2023, CVS Health acquired Oak Street Health for USD 10.6 billion, gaining access to approximately 169 medical centers across 21 states. This acquisition aims to enhance its value-based primary care platform, ultimately benefiting patients' long-term health while reducing costs.

The ongoing advancements in healthcare payment models have significantly influenced physicians' revenue. There is a notable disparity in the average annual revenue and salary between primary care providers and specialist physicians, largely due to differences in expertise and training requirements. In 2023, according to AMN Healthcare’s 2023 Physician Billing report, a primary care physician generated an average annual revenue of USD 1,770,564, while a specialty physician generated USD 4,650,750. Government entities are implementing various initiatives to address revenue gaps among different specialties and emphasize the significance of primary care.

Market Concentration & Characteristics

The industry is experiencing a moderate level of innovation, as multiple market participants roll out new services to enhance their market presence. For instance, in December 2022, Northwestern Medicine Kishwaukee Hospital introduced the Behavioral Health Partial Hospitalization Program. This initiative aims to meet the needs of individuals grappling with mental health conditions like mood disorders, anxiety, depression, and bipolar disorders. By doing so, the program effectively bridges the divide between conventional outpatient services and full inpatient hospitalization.

The market players are leveraging the strategies such as collaborations, partnerships, and acquisitions, to promote reach of their offerings and increase their services capabilities in the country. For instance, in October 2023, The Arthritis Foundation designated Cleveland Clinic as the imminent location for its Osteoarthritis Imaging Center (OIC). The center was tailored to become the nation’s largest repository for imaging data derived from post-traumatic osteoarthritis clinical trials and therapies.

Physician groups participating in Medicare and Medicaid programs must comply with specific regulations related to billing, documentation, and quality reporting to ensure appropriate reimbursement and quality of care for program beneficiaries. For instance, in January 2023, the Centers for Medicare and Medicaid Services (CMS) released new regulatory initiatives for physician groups, which include prior authorization reforms, price transparency and cost estimate mandates, the “next” stage of Cures Act data sharing rules, implementation of once-in-a-decade ACO reforms, and bipartisan telehealth, behavioral health, and Medicare payment laws.

The market players leverage the strategy of service expansion to increase their service capabilities and promote the reach of their service offerings. For instance, in July 2023, UT Physicians launched the Interventional Psychiatry Clinic, which offers services tailored to patients with treatment-resistant psychiatric conditions, conveniently available in a single location. It aims at adopting existing interventional psychiatry services and expanding & innovating by developing new ones.

The level of regional expansion in the market is low due to various government programs and initiatives. Some prominent companies in the market are implementing various strategies, such as launching new services and geographical expansion to consolidate their market position across the country. For instance, in January 2024, Northwell Health Physician Partners expanded its dental medicine services in Nassau County by acquiring two established practices with a history of service in their respective communities.

Practice Size Insights

In 2023, the fewer than five physicians segment dominated with the largest revenue share of 36.67%. This can be attributed to the autonomy and control over clinical decisions and practice management with the high quality of services through the smaller practices. However, the acquisition of small practices by private equity firms and the shift of physicians toward hospital settings is anticipated to drive the market's growth over the forecast period.

Small physician groups often focus on providing personalized, patient-centered care. They emphasize building relationships with patients, understanding their unique healthcare needs, and delivering high-quality services. According to the American Medical Association, around 20% of physicians worked with a practice size of 5 to 10 physician group in 2020. Patients often develop strong bonds with their doctors in smaller settings due to the personalized care and attention they receive. This leads to increased patient loyalty and positive word-of-mouth referrals, which can contribute to the practice's growth.

The 50+ physicians’ segment is expected to witness the fastest CAGR over the forecast period. The rising growth of the segment can be attributed to the shift of physicians aged 40 years and above towards the 50+ physician groups. According to the American Medical Association’s Physician Practice Benchmark Survey, around 38.1% of physicians aged 40 years worked in physician groups of size 50+ physicians.

Practice Type Insights

The single specialty group segment dominated with a revenue share of 60.83% in 2023. The trend of physicians practicing in mid-sized, single-specialty groups is rising. This specialization allows physicians and healthcare providers to develop expertise, streamline services, and offer targeted care to patients within their specialty area. The factors driving this shift toward group practices include profitability, negotiating leverage, lifestyle considerations, and enhanced quality of patient care.

The multi-specialty group segment is anticipated to grow at the fastest CAGR from 2024 to 2030. Multispecialty groups offer a wide range of medical specialties and services at a single facility, providing patients with comprehensive healthcare. This eliminates the need for patients to visit multiple providers at different locations for their healthcare needs.

Moreover, these facilities are adopting several technologically advanced products to cater to the demand of the growing patient population in the U.S. These technologies improve patient care, support data-driven decision-making, and streamline operations. For instance, in February 2023, Privia Health, a technology-driven, national-physician enablement provider, partnered with Community Medical Group (CMG) to launch a Clinically Integrated Network (CIN) known as Privia Quality Network of Connecticut (PQN CT) in Connecticut. The CIN consists of around 430 primary care providers out of over 1,100 multi-specialty providers in over 450 practice locations.

Ownership Insights

The physician-owned segment held the largest market share of 49.49% in 2023. The growth of this segment is driven by the high profit margins, economies of scale, and higher quality of services associated with these practices. Moreover, hospitals have increased their ownership stake in physician groups, and the acquisition of physician practices has also increased. For instance, in January 2024, UnitedHealth Group aimed to acquire Corvallis Clinic, a physician-owned provider of radiology and other specialty services in Oregon at 11 locations.

The private equity segment is expected to grow at the fastest CAGR from 2024 to 2030. Private equity investment has been a significant growth factor in the U.S. physician groups market. Private equity firms have increasingly been acquiring physician practices, providing financial resources and expertise to support their growth & expansion driven by several factors. For instance, in August 2023, Kaiser Foundation Health Plan, Inc. acquired Geisinger Health, a Pennsylvania-based health system consisting of 10 hospitals, 1,700 physicians, and a 600,000-member health plan across 3 states to start a new national healthcare organization, Risant Health. Kaiser aims to invest USD 5 billion in Risant over the next 5 years to expand its presence across the country to compete with players like UnitedHealth Group; Amazon.com, Inc.; Walmart Health; and Aetna Inc. These acquisitions provide the necessary funding and resources to expand their practices & improve operational efficiency.

Regional Insights

The Southeast U.S. dominated the market in 2023 with a revenue share of 25.34%. This can be attributed to the presence of many physician groups in the region, such as Covenant Health (Southern Medical Group), Southeast Medical Group, The Southeast Permanente Medical Group, Inc., and many others.

The West U.S. is expected to grow at the fastest CAGR during the forecast period. This growth can be attributed to the increasing acquisition of physician practices by hospitals in the region. As per a report published in July 2023, by a joint project by the Nicholas C. Petris Center on Health Care Markets and Consumer Welfare, the American Antitrust Institute, the Washington Center for Equitable Growth, and the University of California, Berkeley, there is an increase in the acquisition physician practices by private equity firms across a number of physician specialties from 75 deals to 484 deals between 2019 to 2021 and is anticipated to reach six-time deals in a decade.

Key U.S. Physician Groups Company Insights

The market is fragmented, with the presence of multiple major players. Some of emerging companies operating in the market include Village MD San Antonio, St. Anthony Hospital Physician Group, Riverside Cardiology Associates Medical Group, Central Neighborhood Christian Health Clinics, Dignity Health Medical Group - Nevada, and Premier Family Physicians.

Recent Developments

• In January 2024, The Cleveland Guardians and their longstanding partner, the Cleveland Clinic, renewed their partnership agreement. The extended deal enabled the Cleveland Clinic to be the Official Healthcare Provider for the Cleveland Guardians. Moreover, it continued as the claims partner of the Family Deck and the representing sponsor of the Family Value Pack ticket offer.

• In October 2023, Optum, Inc., and ProHealth entered into a strategic partnership to elevate patient care, introduce innovative technology solutions, and assist ProHealth Care in maintaining its dedication to serving patients & the community.

• In May 2023, South Shore Neurologic Associates and NYU Langone Health collaborated to improve the quality of specialized care in Suffolk County. This collaboration establishes three NYU Langone South Shore Neurologic Associates locations in Riverhead, Patchogue, and Islip.

U.S. Physicians Groups Market Report Scope

U.S. Physician Groups Market Report Segmentation

This report forecasts revenue growth, country level and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the U.S. physician groups market report based on practice type, practice size, ownership, and region:

• Practice Type Outlook (Revenue, USD Billion, 2018 - 2030)

  • Single Specialty Group

    • Primary Care

    • OB/GYN

    • Ophthalmology

    • Surgical

    • Psychiatry

    • Cardiology

    • Anesthesiology

    • Dermatology

    • Radiology

    • Emergency Medicine

    • Others

  • Multi-specialty Group

    • Primary Care

    • OB/GYN

    • Ophthalmology

    • Surgical

    • Psychiatry

    • Cardiology

    • Anesthesiology

    • Dermatology

    • Radiology

    • Emergency Medicine

    • Others

• Practice Size Outlook (Revenue, USD Billion, 2018 - 2030)

  • Fewer than 5 Physicians

  • 5 to 10

  • 11 to 24

  • 25 to 49

  • 50+ Physicians

• Ownership Outlook (Revenue, USD Billion, 2018 - 2030)

  • Physician-owned

  • Hospital-owned

  • Private Equity-owned

  • Others

• Regional Outlook (Revenue, USD Billion, 2018 - 2030)

  • Northeast

  • Southeast

  • Southwest

  • Midwest

  • West