A ebook by Robert Atkinson and Michael Lind argued that huge companies–somewhat than small companies–are the drivers of the financial system. That ebook had the catchy title “Large is Lovely“. A associated query within the space of well being economics is whether or not bigger doctor practices do higher than smaller doctor practices. Maybe massive practices can profit from extra economies of scale (e.g., capacity to extra simply afford digital well being data, make use of inhabitants well being managers, tackle extra monetary danger, disseminate the most recent scientific tips) and economies of scope (e.g., a number of specialties could be housed in the identical workplace). Alternatively, smaller practices might provide extra customized service, have much less forms, and be extra nimble.
A paper by Zhang et al. 2021 makes use of Medicare claims knowledge to reply this query. Whereas the paper doesn’t definitively conclude whether or not or not bigger main care doctor practices are ‘higher’, these massive practices do appear to have the ability to extra simply cut back well being care spending amongst their sufferers. The authors write:
We first doc that main care organizations have consolidated everywhere in the United States between 2008 and 2014. We then present that areas that skilled better consolidation are related to better decline in general healthcare spending. Lastly, in our main train, we exploit transitions of sufferers throughout organizations which can be pushed by modifications within the organizational affiliations of their main care physicians to check the affect of organizational dimension on general spending. Our most well-liked specification means that sufferers switching from small to massive doctor organizations cut back their general healthcare spending by 16%, and that this discount is primarily pushed by a 13% discount in main care visits and 0.09 (21%) fewer inpatient admissions per yr.
In accordance with this paper, ‘huge is gorgeous’.