THE BLOG
01/17/2015 06:21 pm ET Updated Mar 19, 2015

Is Bigger Medicine Better Medicine?

For better and worse, American medicine is increasingly controlled by large corporate entities and Obamacare is accelerating the transition. Observers including me who see our medicine as highly inefficient view this trend as an opportunity to impose rationality, but there are also clearly pitfalls.

My best guess is that this change makes it more likely we'll get the right care from the start, but will find ourselves frustrated by an increasingly bureaucratic and inflexible system when things go awry. That's speculation, but the trend toward greater concentration is clear.

Howard Gleckman writes of how a growing number of hospice agencies that deliver care to the dying are operated by large for-profit chains.

At least half of America's physicians are employed by someone else. Walk-in "doc in a box" facilities that offer care on demand at the expense of traditional long-standing doctor-patient relationships are springing up everywhere. A few clicks from an online directory lays out the options, including prices. We're getting tools that approach the reform dream of transparency that will allow customer-patients to shop on the basis of both quality and price.

Minor problems are now often appropriately resolved by someone with less training -- and lower bills -- than a physician, undermining fears of an impending physician shortage.

Obamacare accelerates the corporate trend with its emphasis on evidence-based medicine, accountable care organizations and electronic medical records, all of which have an inherent bias toward large organizations.

Drug companies are finding that their ability to profit from expensive new drugs is being challenged by aggressive resistance from pharmacy benefit managers who control a growing share of the market. Government buyers (like the Department of Defense, Veterans Administration and some state medicaid programs) have long driven hard bargains by favoring a single drug in a given category. Now private buyers facing sticker shock for new Hepatitis C drugs are playing the same game.

All this appears to be good news. But not all change is for the better.

As hospitals and physician groups become larger (which could yield better care) they become mandatory buys that can negotiate higher prices from insurers creating preferred provider panels. One looks in vain for an insurer that'll introduce an economical plan that includes fewer than a third of physicians or hospitals in town. The very bulk and expertise that allows providers to become more efficient simultaneously enhances their ability to raise prices.

The theory (always easier to explain than execute) of reducing costs while raising prices is a seductive one that will fuel continued concentration. That's worked until now because of muted antitrust responses and a public perception that those actually providing services (doctors and hospitals) are the good guys and those who pay for them (insurers) are the bad guys.

That perception may be challenged.

Insurance companies probably have less ability to control our medical bills than they did in decades past when the provider community was more fragmented.

Taken together all these changes will probably be good for our health. But change is seldom welcome and transitions are often uncomfortable. There's are some big ones happening in medicine these days.