Hartford Business Journal

20 HARTFORDBUSINESS.COM | March 14, 2022 Pandemic fuels physician consolidation trend, as CT struggles to retain doctors By Robert Storace rstorace@hartfordbusiness.com T he trend in recent years in Connecticut and nationally continues to show hospitals and other corporate entities buying up smaller physician practice groups, and healthcare experts say they don't see it slowing down, even in the face of potential increased scrutiny from policymakers and regulators. Many younger physicians right out of medical school, and older doctors looking for an exit strategy to sell their practice and focus strictly on medicine as opposed to administrative and IT responsibilities, are more than willing to join larger groups or healthcare systems. The numbers — buoyed by the global health pandemic — show that by the end of 2020, 49.3% of American doctors were employed by hospitals and or health systems, according to an analysis from the Physicians Advocacy Institute (PAI). In addition, PAI research showed that hospitals and other corporate entities acquired 20,900 physician practices from 2019 to 2021, representing a 25% increase in corporate-owned practices overall. Experts say COVID in many instances accelerated the decision of doctors who were finding it hard to keep afloat financially to make the move to larger health entities. "COVID made it worse," said Susan Huntington, who is the chair of law firm Day Pitney's healthcare practice and vice chair of the corporate and business group. "If the key person like an office manager in that small practice got sick from COVID, for example, that was it. At the start of COVID people could not get supplies and masks and small physician practices were at the end of the food chain." Huntington, who represents many physician groups and previously worked for Hartford HealthCare providing legal advice, said many younger physicians are eager to avoid the hassles that come with having their own practice. Oftentimes, too, Huntington and others said, larger health systems offer higher pay. "Younger doctors — those who are right out of school — do not mind being employees of hospitals and larger companies," she said. Challenges mount While physician practice consolidation has been going on for years, it's gotten more attention over the last 12 months as policymakers and others try to get a better understanding of its impact on the marketplace, including on the costs and quality of care. For example, state lawmakers last year passed a law that requires the Office of Health Strategy (OHS), which oversees the healthcare industry, to create a working group to study and recommend new regulations for physician practice mergers and acquisitions. Currently, OHS can't review acquisitions involving group practices with fewer than eight physicians, limiting the agency's oversight scope. And the trend of physician group M&A activity is at the heart of a January federal lawsuit St. Francis Hospital and Medical Center filed against Hartford HealthCare. The suit alleges HHC is trying to create a monopoly on hospital services by acquiring physician networks, particularly cardiologists, and demanding that they refer their patients only to Hartford HealthCare. HHC denies the allegations, saying they are without merit. Certified Public Accountant John Trusler, a director at Hartford-based accounting firm Whittlesey, said the most active physician group purchasers have been the state's three largest health systems: Trinity Health Of New England, Yale New Haven Health and Hartford HealthCare. He said the days of the solo physician internal medical doctor seem to be behind us. "[Doctors] view it as a way to get away from the administrative responsibilities and to let someone else do that," he said. Things like investing in electronic health records and keeping up with HIPAA privacy rules are complicated for small groups without a lot of resources, he said. John Trusler Susan Huntington PHOTO | PIXABAY/ORZALAGA

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