Study Highlights Steep Decline in Rural Independent Practices

The number of independent physicians in rural areas fell 43% between January 2019 and January 2024, raising concerns about reduced access, rising costs and declines in care quality, according to new data from Avalere commissioned by the Physicians Advocacy Institute (PAI), an advocacy group for independent physician practices. 
 
There were 52,600 practicing physicians across 30,000 medical practices in rural areas at the start of 2019. By January 2024, 2,500 fewer physicians practiced in rural areas and 3,300 medical practices closed. The impact was primarily on independent physicians and practices, meaning they are not employed or owned by health systems or other corporate entities like insurers and private equity firms, according to researchers.
 
Nearly 9,500 physicians in rural areas left independent practice, most notably in the Midwest and Northeast. Indiana, Iowa, Maine, Massachusetts, Minnesota, New Hampshire, New Jersey, Ohio, South Carolina and South Dakota lost more than 50% of independent physicians.
 
Approximately 7,300 independent medical practices closed or were acquired by health systems or other corporate entities, marking a 42% decline in the five-year period, according to the data.
 
“Small, independent practices have been the cornerstone of medical care for many people in rural areas,” said Kelly Kenney, chief executive officer of PAI, in a statement. “We’ve seen with rural hospitals that corporate acquisitions often lead to closures. We are concerned that this same profit-first approach will cause corporate owners to shutter rural practices that don’t produce high enough revenues, leaving patients without the access to care they need.”
 
Corporate entities added nearly 3,200 physicians to their payrolls during the study period—a 57% increase. At the same time, corporate entities nearly doubled practice ownership in rural areas, controlling 6,168 practices as of January 2024. Overall, 75% of rural physicians were employed by health systems and corporate entities, and 61% of all rural medical practices were owned by non-physicians. These figures mirror previous PAI-Avalere findings on national physician employment and practice ownership trends.
 
The report details challenges facing patients as health systems and corporate entities employ a greater share of physicians and acquire more medical practices. Policymakers have voiced concerns that consolidation could drive up costs, worsen care quality and exacerbate access issues, PAI said.
 
Methodology
The analysis used the IQVIA OneKey database that contains physician and practice location information on hospital/health system ownership from January 2019 through January 2024. These data include solo and single-location small practices as well as large, multi-specialty, multi-location group practices. Physicians and practices were identified as rural or non-rural based on provider ZIP codes, mapped using the Health Resources and Services Administration’s Federal Office of Rural Health Policy crosswalk.