Big Medicine can lead to big monopolies

The surgeon who argued in The New Yorker that healthcare systems should act more like restaurant chains, using their size to provide a better variety and quality of goods and services at lower cost, says monopolies are the biggest potential drawback of so-called "Big Medicine."
Large healthcare systems can centralize common functions, quickly innovate and standardize diagnosis and treatment, allowing them to pay more attention to execution, Atul Gawande, M.D., M.P.H., argued in his original 2012 article. Now, in an interview with the Urban Institute's Robert Berenson, M.D., Gawande details the two major concerns of monopolies: higher prices and reduced pressure to provide quality of care.
But competition is building between different local monopolies, which he says "will drive innovation and price. The more ways there are to drive that kind of competition, the better." For example, large networks such as the Cleveland Clinic and Intermountain Health Care known for their quality are contracting with large employers to provide profitable surgeries such as transplants and knee replacements at a lower, fixed price. The employers save money even when paying for employees' travel and family lodging.
While there are concerns around size, we have to shift to team-based medicine and the systems that you need to deal with that demand size somewhere," Gawande says.  "There are tradeoffs, but we can't get out of where we are without creating size somewhere, and then dealing with the repercussions."
Cost pressures are increasingly forcing smaller hospitals to join larger systems or close. "Smaller and independent hospitals are going to continue to fall by the wayside. This trend will accelerate because you've got to be part of a big network that has deep enough pockets to bear that risk," Glenn Melnick, a healthcare economist with the University of Southern California, told the Union-Tribune in San Diego after a smaller local hospital said it would close this month.
But the road to growth can be a bumpy one. A recent study found that costs increased up to 20 percent when hospitals owned physician groups.
For more information:
- check out the interview
- here's the interview announcement
Related Articles:
Hospital ownership of doc groups leads to higher costs
Pending hospital closure mirrors woes of small hospitals
Hospitals must consolidate, merge to manage population health
4 mistakes hospitals make in the search for partnerships
Small hospitals struggle to adapt to new healthcare models
What hospitals can learn from restaurant chains