New PRI Issue Brief: Government Policy Is Consolidating the Practice of Medicine

SACRAMENTO, Calif., Feb. 10, 2026 /PRNewswire/ -- A new issue brief released today by the Pacific Research Institute -- the California-based, nonpartisan, free market think tank -- finds that certain states' efforts to tighten corporate practice of medicine laws hurt independent physicians, empower hospitals to consolidate local provider markets, and raise healthcare costs.

"Competition is a prerequisite for affordable, high-quality care," said Dr. Wayne Winegarden, the author of the issue brief and Director of the Center for Medical Economics and Innovation at the Pacific Research Institute. "States are understandably concerned about consolidation within their healthcare markets. Unfortunately, some are responding by implementing policies that risk accelerating market concentration, to the detriment of patients."

The U.S. physician market is consolidating at a rapid pace. Between 2019 and 2024, hospitals acquired 7,600 practices and 74,500 physicians.

To resist acquisition, some independent physician practices have begun partnering with entities called management services organizations, or MSOs. Physicians retain full control over clinical decision-making but delegate administrative, financial, and operational tasks to their MSO partners.

"Partnering with an MSO gives physician practices greater access to capital, scale, and expertise without robbing them of clinical autonomy," Winegarden said. "It's a win-win situation for doctors and their communities."

Unfortunately, this model is under attack by lawmakers and bureaucrats. States concerned about consolidation within their healthcare markets have moved to expand or more aggressively enforce bans on the corporate practice of medicine, including partnerships between medical practices and MSOs.

"These bans do the opposite of what they purport to do, ironically encouraging greater healthcare consolidation," Winegarden said. "They almost exclusively attack independent physicians and put them at a competitive disadvantage relative to hospitals. The result is less competition among providers -- and higher prices for patients."

"Payment distortions, regulatory favoritism, and uneven enforcement -- not physician ownership structures -- are pushing independent practices out of the market," Winegarden said. "Efforts to restrict the corporate practice of medicine should strengthen competition -- not unintentionally extinguish it."

The Pacific Research Institute (www.pacificresearch.org) champions freedom, opportunity, and personal responsibility by advancing free-market policy ideas. Follow PRI on Facebook, Twitter, and LinkedIn.

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SOURCE Pacific Research Institute