Is bigger better in healthcare?


I'm a fan of the mom-and-pop store. Even if it means paying a little more for the same product available at a big-box retailer, I would prefer shopping at a small, local store. That's because I tend to receive better customer service at the smaller shops where they personally value my business.

I would allege the same to be true in the healthcare industry. When given the choice, I would rather see a primary care doctor at a small clinic than at a hospital. And I definitely would prefer that clinic to be independently owned instead of part of a larger health system.

Again, that's because I feel that the attention doctors pay to my health and me personally increases when they aren't part of a chain business.

Insurers have reached similar conclusions, though for somewhat different reasons. America's Health Insurance Plans alleges that frequent mergers and acquisitions have led to excessive out-of-network charges, which can be anywhere from 30 percent to 100 percent more than Medicare rates. And AHIP also claims that mergers and acquisitions have driven an increase in inpatient hospital prices, allowing hospitals to push back against insurers' attempts to negotiate lower payments.  

Fortunately, there are steps that insurers can take to taper the impact of provider consolidation. For example, they can continue developing quality care models like accountable care organizations and patient-centered medical homes, where providers assume a larger share of the risk for consumers' care.

And of course they can implement narrow networks like so many have done with plans sold on the health insurance exchanges. Excluding the higher cost providers, a group often comprised of doctor groups owned by large health facilities, can help steer their members to the individual doctor offices.

But I don't want to completely knock the large chains, whether retail or healthcare, because they do have a place in our economy. They can provide services and products that are much harder to come by in a small, local store or doctor office. And doctors potentially have more resources at their disposal when they're working as part of a larger health facility since they have access to multiple colleagues and their opinions.

Regardless of which side you fall on--bigger is better or smaller, local is more personal--the overall goal is always to save costs and improve quality care. That's what I hope to see rising in the whole health insurance industry, and I trust that doctors and insurers do too. - Dina (@HealthPayer)