The Market Forces Quietly Adding Thousands to Patient Bills
By Elisabeth Rosenthal , KFF Health News
Sept. 8, 2026
Healthcare integration, also known as privatization, is occurring at a breakneck pace across the nation, with endless permutations:
- Hospitals are buying doctors’ practices and surgery and imaging centers.
- Insurers are buying doctors’ practices and specialty pharmacies and often merging with pharmacy chains.
- Private equity firms are behind many of the deals, buying practices, reorganizing operations, paring costs, then selling at a profit in a few years to a hospital or insurer higher up the healthcare food chain.
While the stated purpose is generally greater efficiency, studies show that for patients, the result is higher prices and worse health outcomes. That’s in part because the purchases have been driven by financial efficiency, not more seamless and attentive care.
The numbers are alarming. Over the past decade, the number of doctors working for hospitals rather than in private practice has more than doubled. Today 82% of physicians are employed by hospitals, other corporate entities (like insurers), or private equity firms. For example, UnitedHealth Group’s then-CEO said in 2024 that it employed around 10,000 primary care physicians. But that did not include UnitedHealth’s 80,000 “affiliated” physicians.
Countless health policy experts have proposed regulations mandating “site-neutral payment,” a system in which providers would get the same amount for a procedure no matter where it was performed. The Trump administration in July proposed instituting site-neutral payments for some services for Medicare beneficiaries.
If two hospitals merge and become the only care provider in town, that leaves patients with less choice and can make it easier for the new monopoly to skimp on care and raise prices.
When Harvard researchers assessed the effect of hospital purchases of gastroenterology physician groups on colonoscopy care, the negative impact was clear. “It changed the way they did business,” said Saghafian, the paper’s main author:
All told, quality went down and prices as well as complication rates rose. “What improves is ‘operational throughput,’” or the efficiency with which the system could move patients through colonoscopies fastest with the least staff involvement, Saghafian said. “That’s a financial metric.”
The horse is out of the barn. All the biggest health insurers have already merged with pharmacy benefit managers and pharmacies, that require members to use their pharmaceutical companies. For example:
- CVS acquired Aetna in 2018, meaning Aetna subscribers are directed to the CVS Specialty pharmacy through Caremark, its pharmacy benefit manager.
- Cigna owns Accredo (a specialty pharmacy), Express Scripts (a pharmacy benefit manager), and EviCore (which does preauthorization for prescription requests).
- UnitedHealth includes Optum Rx (a pharmacy benefit manager), Optum Specialty Pharmacy, and Optum Infusion Pharmacy.
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Mark Cuban, the billionaire investor who in 2022 launched the Cost Plus Drugs site, which sells mostly generic drugs to cash-paying patients at a discount — often for less than what they would pay using insurance, said, “It’s crazy stuff,” he said of vertical integration. “The right pocket gives to the left pocket.”