The corporatization of medicine: Part One

This will be a multi-part series. The days of independent community hospitals and small
physician practices are just about over. Paul Starr ’s famous book The Social
Transformation of American Medicine tells the story
of rise of a “sovereign” medical profession, consisting largely of
entrepreneurs who owned their own individual or small group practices and made
their living as independent business people. They were generally suspi cious of
alternative models such as large group practice and salaried employment. But recent
decades have been marked by one overarching trend: the consolidation of the
medical institution into fewer and fewer, larger and larger entities.[1] Horizontal
consolidation means that similar institutions merge into chains. This has
included not only hospitals but also nursing homes, dialysis clinics, and other
kinds of facilities. Vertical consolidation means that various kinds of
facilities are brought into the same firm, mostly meaning hospital chains
buying physician practices, nursing homes and so on – which at the same time
achieves horizontal consolidation.Consolidation of hospitals, insurers and physician services
goes back to at least the 1990s.[i] A
common way of measuring market concentration in an industry is called the Herfindahl-Hirschman
Index (HHI),[2] which
can range from any arbitrarily low number up to 10,000, representing a monopoly
by a single firm. An HHI of 2,500 or greater is considered highly concentrated.
A report publ...

Source: Stayin' Alive - July 20, 2023 Category: American Health Source Type: blogs