Medicare Primary Care Shifts Toward Hospital and Multispecialty Practices

A recent study published in JAMA Health Forum reveals a significant shift in the primary care landscape for traditional Medicare beneficiaries over the past decade. Analysis of over 39 million primary care visits from 2012 to 2022 shows a marked move away from physician-owned practices toward hospital-affiliated clinics, rural health centers, and large multispecialty groups. This trend reflects changing care settings and practice structures within the Medicare system.

The percentage of primary care visits in physician offices declined from 79.2% in 2012 to 68.8% in 2022. Concurrently, visits to rural health clinics (RHCs) increased from 8.0% to 11.0%, federally qualified health centers (FQHCs) rose from 5.2% to 8.2%, and hospital outpatient departments (HOPDs) saw a rise from 5.8% to 6.9%. These shifts are linked to policy changes, notably the Affordable Care Act (ACA), which enhanced funding for RHCs and FQHCs and influenced reimbursement structures.

Medicare reimbursement policies appear to incentivize hospital-owned outpatient departments by offering higher payment rates than independent physician offices, facilitating consolidations and mergers with larger health systems. Additionally, multispecialty practices have gained prominence; visits to solo primary care physicians (PCPs) dropped from 33.4% to 24.7%, while visits to multispecialty practices increased from 13.4% to 24.2%. These changes underscore the evolving composition of primary care delivery.

The study's methodology, utilizing tax identification numbers to define practice types, may emphasize billing relationships more than clinical integration. It also excluded data on nurse practitioners and physician assistants, though similar trends were observed across states with varying scope-of-practice laws. This research prompts further investigation into how these shifts might impact healthcare costs, patient access, and quality of care amid ongoing Medicare market changes.

As large hospital systems and multispecialty groups increasingly dominate primary care delivery for Medicare beneficiaries, insurers and providers must consider the implications for payer-provider dynamics, regulatory compliance, and cost containment strategies. Monitoring these trends is critical for stakeholders aiming to optimize care coordination, reimbursement models, and patient outcomes in the evolving healthcare landscape.