The structure and scope of the healthcare industry continues to change in response to the healthcare reform legislation and general market trends. One apparent result of these changes is that many healthcare organizations are finding new incentives to consolidate.
As the paradigm shifts towards an emphasis on integrated care and population health, more risk is placed on the providers and those providers are motivated to pool assets and resources. With this in mind, consolidation is a natural response to the push for more clinically integrated networks.
Due to greater bargaining power, large practices can generally use their sway to negotiate higher reimbursement rates than rates received by small practices. The intent of consolidation is to lower cost and increase quality of care; however, the effect of consolidation on the quality of patient care is still being debated in current research.
Dr. Martin Gaynor, Chairman of the Health Care Cost Institute, testified before the Committee on Ways and Means of the House of Representatives, that “current research evidence…does not indicate a clear impact of consolidation on quality in those markets in general.”
What follows is an investigation of what could happen when health systems and hospitals acquire small practices and the challenges facing small practices who hope to remain independent through the lens of data from the Commonwealth of Massachusetts.
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