Who Owns Rural Medicine?

More than five years ago in this weekly blog post, “Which Way Will the Private Equity Pendulum Swing for Patients?”, I said the most important first question a patient should ask their doctor before an office visit is, “Who owns this practice?” The answer to that business question — ownership — will hold great sway over how the rest of the visit goes from a clinical standpoint. We all know why.

For patients living in rural areas, that question is becoming more important than ever, according to a new report.

The Physicians Advocacy Institute released the report, which is based on an analysis of data from IQVIA by Avalere, a Washington-based healthcare consulting firm.

The headline trumpeted by the healthcare trade press from the report was the fact that the number of physicians practicing in rural areas dropped by 5% over the five-year study period — from 52,589 in 2019 to 50,101 in 2024. As we’ve said before, like in this blog post, “What’s Another Two Minutes for a Knee Replacement?”, healthcare is a business. Businesses go where customers are. There are more customers, i.e., potential patients, for doctors in urban areas, so the decline isn’t that shocking.

What’s more interesting to me is who owns what physicians and practices are left in rural markets during the continuing exodus. The answer, according to the report, is increasingly hospitals/health systems and other corporate entities like health insurance companies and private equity firms. Here are the numbers.

• Corporate entities owned 6,168 rural medical practices in 2024, up 92% from 2019.
• Hospitals and health systems owned 10,307 rural medical practices in 2024, up 11% from 2019.
• 8,793 doctors worked in rural medical practices owned by corporate entities in 2024, up 57% from 2019.
• 28,841 doctors worked in rural medical practices owned by hospitals and health systems in 2024, up 15% from 2019.

The trend lines are clear. If our hypothesis is true, spending per patient treated by rural medical practices will go up as the practices’ owners incentivize the doctors employed in the practices to order more tests and refer more patients to in-network medical specialists.

Amirite?

We’ll see.

Thanks for reading.