Emergency Physician Groups: What’s Driving the Consolidation Trend?

Vertical: Emergency Medicine
Author: JC Lupis
Date: July 2019

More Emergency Physicians Choose Stability

Many doctors are foregoing the increasing difficulties of managing their own practices and opting instead for the security and support provided by employment with established practices. Whereas 38% of emergency physicians in 2012 classified themselves as practice owners, that figure is down to 26% in 2018. Instead, more are now employees, preferring the stability of belonging to an owned physician group.

Physician Groups Recognize the Benefits of Economies of Scale

Faced with increasingly larger insurers and hospitals, smaller independent physician groups are recognizing that they need more scale to carry weight when negotiating prices and compensation. Balance billing legislation on the horizon could also lead to consolidation as smaller providers look to merge with larger, in-network providers.

Meanwhile, larger emergency department (ED) groups are also able to offer more competitive malpractice insurance rates, handle burdensome back-office functions, and help recruit in an environment where emergency medicine is one of the most sought-after specialties.

Value-Based Reimbursement Models Shift the Landscape

The industry’s shift towards value-based care – and its ensuing payment models – mean that physician groups must make sizable investments in information technology (IT), data capture, and analytics in order to demonstrate their value. The number of hospital inpatient quality metrics has almost doubled this decade, and the Merit-based Incentive Payment System (MIPS) has added to ED physicians’ administrative burden. These IT costs and reporting requirements can be diffused when shared across a larger organization.

The Economics Matter

Independent ED contract management groups must consider that in today’s business conditions:

  • Existing contracts are always under siege, whether from those across the table or from other physician groups seeking to expand and access new patients;
  • Even new contracts can be difficult to take on, as the initial cost of absorbing a new contract can be hefty when waiting several months for receivables to be paid;
  • Valuations remain appealing given buyers’ appetite and the stage of today’s broader economic business cycle, but they may not remain that way as a recession looms.

Emergency Physician Market: Key Data Point

Emergency department visits reached a record 145.6 million patients in 2016 (the latest data available), up from 136.9 million visits in 2015.

Source: Centers for Disease Control and Prevention (CDC)

Emergency Physician Market: Key Chart

Trends in Distribution of Emergency Medicine Physicians, by Ownership Status


GHA’s Emergency Physician Market Brief includes the following sections:

  • Emergency Physician Market-At-A-Glance
  • Key Emergency Physician Market Data
  • Emergency Physician Group Market Developments
  • The Mergers & Acquisitions Landscape
  • What’s Driving the Consolidation Trend?

To inquire about a copy, please contact research@ghadvisors.net.