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Are Large Hospital Systems Best for Value-Based Care?

As health systems increase in size by acquiring other hospitals and physician groups, some within the healthcare industry have questioned whether the consolidation trend will lead to efficiencies that many tout.

Vikas Saini, MD, president of The Lown Institute, and Shannon Brownlee, senior vice president at The Lown Institute, wrote an op-ed in Bloomberg arguing that bigger hospital systems are not likely the best vehicles to achieve value-based care.

Dr. Saini and Ms. Brownlee pointed to many studies that concluded large hospitals and health systems often command the highest prices, and those high-price organizations fare no better in quality measures than lower-price counterparts.

If hospital chains are more prone to increased prices, and thus higher costs, how will healthcare achieve value-based care that emphasizes quality and the reduction of wasteful services? The authors said cohesive provider groups, specifically those led by primary care physicians, nurses and other midlevel providers, must be viewed as the solutions.

"We're not calling for a return to the days of Marcus Welby, MD, when doctors worked as solo practitioners, accountable to nobody and able to drive up volume (and their incomes) in a fee-for-service world," according to the article. "But given the proper incentives, physician groups could become one of the best levers for driving change toward a more humane and affordable healthcare system."

Dr. Saini and Ms. Brownlee also said a single-payer healthcare system and strong financial support for primary care-based accountable care organizations are the keys to a better system.

"Until we give primary care groups control over what happens to patients, large hospital systems and specialist-dominated groups — those with greatest access to capital — will be able to keep raising prices, even as they issue press releases about their plans to control costs and improve care," the authors wrote.

More Articles on Hospital Consolidation:
10 Key Healthcare Transaction Trends
Industry Report: Hospital Mergers Benefit Patients
Point-Counterpoint: Is the Rush to Hospital Consolidation Rash?

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