Health Care Innovation Forum: Is Bigger Better?  Is Bigger Cheaper?

Business is business!

And business must grow!

And I’m figuring

On biggering,

And biggering,

And biggering.

Doctor Suess, The Lorax

These days traditional wisdom has it that hospitals and physician groups must grow bigger to provide better, cheaper services.   Consequently a big integrated health system is better and potentially cheaper than a single free-standing hospital.  Likewise, a bigger medical group.  Better and cheaper yet, an accountable care organizations consolidating hospitals and doctors into bigger organizations following rules of the biggest health care spender of them all,  CMS, as it enforces Obamacare rules.

Here, in a February 16 Letter to the Editor of the Wall Street Journal,  Tim Norbeck, CEO of the Physicians Foundation, whose mission is to advance, defend, and promote the interests of private practices,  challenges the notion that bigger is necessarily better and cheaper.

Regarding Clayton Christensen, Jeffrey Flier and Vineeta Vijayaraghavan's "The Coming Failure of 'Accountable Care'" (op-ed, Feb. 19): That failure has already arrived. One of the great fallacies in the Affordable Care Act is the flawed concept that bigger was better. Not only is bigger not better, it is not cheaper either.

According to the Medicare Payment Advisory Commission, a 15-minute doctor visit cost the program about $70 last year at a free-standing physician practice, but the same visit ran about $124 if it was billed as a hospital-outpatient service. WellPoint Inc. recently cited an example in which the cost for a spine MRI done at a free-standing physician center in Nevada ranged from $319 to $742, while the same test done by a hospital would generate charges from $1,591 to $2,226. No wonder hospitals are so eagerly recruiting physicians from private practice to join their systems.

These large health entities are destroying any hope for real competition in the medical marketplace, driving out or buying out independent doctors and extracting as much money as possible from taxpayer-funded entitlements and the privately insured. What a shame that these "bigger is better" financial incentives couldn't have been diverted instead to provide private-practice physicians with the help they needed to stay in independent practice. Increasing fees to them would be far less costly to our health-care system and provide competition.

Tim Norbeck

CEO

The Physicians Foundation

Bonita Springs, Fla.

Tweet:    Obamacare is based on the notion that bigger is better in terms of quality and price. So far this has not proven to be so when hospitals acquire physician practices.