With both Big Law and Big Ed, those paying the bills are frustrated and seeking alternatives to the status quo. And they are making their preferences known in the marketplace. Over time, some members of the “old guard” (the top law firms and the top universities) may survive, albeit leaner than before. Some new business models will likely also emerge, for instance inexpensive MOOC (massive open online courses) as a partial alternative to traditional colleges. There’s no way of knowing exactly how things will shake out. But this uncertainty is a natural feature of the marketplace — a process that economist Joseph Schumpeter calls “creative destruction.”
In contrast, the shakeup in health care is towards greater — not lesser — consolidation. This is because the government — not patients — will be increasingly in charge of the money. Under ObamaCare, government is projected to account for a whopping 66% of overall health spending. More centralized control of health spending will inevitably mean more centralized control of health care.
Nor is this centralization of health care some “unintended consequence” of ObamaCare. Rather, it is an explicitly desired goal. In 2010, Obama health advisor Nancy-Ann DeParle wrote in the Annals of Internal Medicine that the health law will “accelerate physician employment by hospitals and aggregation into larger physician groups” and that “physicians will need to embrace rather than resist change.”
This consolidation of American medicine is merely a continuation of a much older strategy. In his book Liberal Fascism, Jonah Goldberg described how the Roosevelt administration sought similar consolidations of American agriculture and business during the New Deal:
[I]f you… want to use business to implement your social agenda, then you should want businesses themselves to be as big as possible. What’s easier, strapping five thousand cats to a wagon or a couple of giant oxen?
Similarly, it will be much easier for the federal government to regulate 1,000 large hospital groups and ACOs than 10,000 small private practices and independent hospitals. The New York Times notes that after physicians become hospital employees, they become much more accepting of government controls than their counterparts in private practice.
And it’s no secret that many on the political left desire the ultimate form of “Big Medicine” — namely, a “single-payer” health system fully controlled by the government. (Nor is it a coincidence that the president’s proposed “fix” for the current education upheaval bears eerie similarities to ObamaCare.)
There’s nothing inherently wrong with “Big” organizations as such, provided they arise naturally from market forces. For a while, Apple was the largest company in the world, but it gained that status by selling products to willing consumers in the marketplace.
Likewise, when a physician freely chooses to become a hospital employee rather than enter private practice based on genuine personal and professional preferences, that can be a perfectly legitimate choice.
But when the government tilts the playing field to drive doctors out of independent private practices and into more easily regulated large entities, that’s a different matter altogether. As Dr. Jay Parkinson noted, this means “the business model of a doctor’s practice is determined by bureaucrats in Washington.”
So how will this affect doctors’ freedom to practice and patients’ freedom to receive medical care? Stay tuned. Future articles in this series will discuss how government-spawned Big Medicine will affect patients, the role of mandatory electronic medical records in Big Medicine, and how patients can best protect themselves from Big Medicine.
Also read “Obamacare and the Consolidation Wave” by Rich Baehr.
Next Week: “How Big Medicine will harm patients.”