February 15, 2014

TRAIN WRECK UPDATE: Your Hospital Bill Is About to Get a Lot More Expensive: Doctors are fleeing private practices for the security of hospitals, and the exodus will be a disaster for U.S. health care.

Absorbing private practices is just one more way hospitals can make themselves bigger and more powerful. The market power of hospitals relative to insurers is already one of the most pernicious market imbalances in U.S. health care. This trend will only make it even less balanced. The bigger hospitals get, the more they can jack up their prices—up to 44 percent higher according to one estimate. . . . The more doctors start working in hospitals, the less sustainable our current health care system looks in the long term.

To be fair, this trend — driven, I think, largely by increased paperwork requirements that make the minimum efficient scale of a medical practice rather large — has been underway for decades.