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Big Med

Megaproviders and the High Cost of Health Care in America

Big Med

Megaproviders and the High Cost of Health Care in America

There is little debate that health care in the United States is in need of reform. But where should those improvements begin? With insurers? Drug makers? The doctors themselves? In Big Med, David Dranove and Lawton Robert Burns argue that we’re overlooking the most ubiquitous cause of our costly and underperforming system: megaproviders, the expansive health care organizations that have become the face of American medicine. Your local hospital is likely part of one. Your doctors, too. And the megaproviders are bad news for your health and your wallet.

Drawing on decades of combined expertise in health care consolidation, Dranove and Burns trace Big Med’s emergence in the 1990s, followed by its swift rise amid false promises of scale economies and organizational collaboration. In the decades since, megaproviders have gobbled up market share and turned independent physicians into salaried employees of big bureaucracies, while delivering on none of their early promises. For patients this means higher costs and lesser care. Meanwhile, physicians report increasingly low morale, making it all but impossible for most systems to implement meaningful reforms.

In Big Med, Dranove and Burns combine their respective skills in economics and management to provide a nuanced explanation of how the provision of health care has been corrupted and submerged under consolidation. They offer practical recommendations for improving competition policies that would reform megaproviders to actually achieve the efficiencies and quality improvements they have long promised.
This is an essential read for understanding the current state of the health care system in America—and the steps urgently needed to create an environment of better care for all of us.

336 pages | 2 figures, 3 tables | 6 x 9 | © 2021

Economics and Business: Business--Business Economics and Management Studies, Business--Industry and Labor, Health Economics

Sociology: Medical Sociology

Reviews

“For years, allies of big medicine have argued that Bigger is Better. Dranove and Burns take on that argument and show it is not true. They point out how big medicine is failing, and how it can be reformed. This book is wonderfully informed and thoughtfully presented.”

David Cutler, Harvard University

“Incorporating tough-minded analysis with powerful rhetoric, this book describes why the US healthcare delivery system fails us, why mergers are unlikely to help, and what industry and policy leaders can do to turn things around.”
 

Leemore Dafny, Harvard Business School

Big Med is an absolute treasure trove of health care antitrust history, offering an important overview of the last two decades of the US health care industry through a competition lens. Its findings will appeal to health systems leaders and health economists alike.”
 

Melissa Thomasson, Julian Lange Professor of Economics at Miami University and research associate for the National Bureau of Economic Research

Table of Contents

Preface
Introduction
Chapter 1: The Evolution of the Modern Hospital
Chapter 2: From Hospital to Health System
Chapter 3: Why Integration Failed
Chapter 4: The Fall and Rise of the Antitrust Agencies
Chapter 5: History Repeating: The Second Wave of Integration 
Chapter 6: Integration Is Still Failing
Chapter 7: New Antitrust Challenges
Chapter 8: Countervailing Power
Chapter 9: Will Disruptors Save the Health Economy?
Chapter 10: Recommendations for Competition Policy
Chapter 11: Recommendations for Management Policy
Acknowledgments 
Notes
Index
 

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