It's clear that hospitals and health systems are once again acquiring physician practices in an effort to stabilize their referral networks. However, according to a recent article in the Washington Post, health systems are not the only buyers looking to get into the doctor business. Apparently, a number of large health insurance companies, including United Health Group, are quietly acquiring physician practices and building employed physician networks as a means of further managing the care they pay for. According to the article, other insurers including Humana and Wellpoint as well as Highmark in Pennsylvania which recently struck a deal to acquire West Penn Allegheny Health System, are expanding beyond just payment for health care services and looking to get into the delivery side as well.

What all of this means for the broader physician marketplace remains to be seen. Presumably, these insurers will be targeting practices that meet a specific profile including those that see a large number of their covered beneficiaries. However, because acquisition of key physician practices in a given market can change referral patterns overnight, the entry into the market of another potential buyer of physician practices could heat up competition for the bigger or better performing practices in specific markets.

For physicians, of course, aligning with the wrong player could have devastating consequences for the ongoing viability of their practices. However, on the upside, because many health insurers are for profit and do not benefit from physician referrals in the same way that hospitals and health systems do, some of the financial and legal constraints which limit the purchase and compensation terms that a not-for-profit hospital can offer a physician may not apply to insurers acquiring practices.

Clearly, for all players in the health care market, particularly physicians, this is a development worth keeping an eye on.