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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 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.
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.
- GenresSociologyHealth Care
336 pages, Hardcover
Published May 25, 2021
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Displaying 1 - 5 of 5 reviews
June 1, 2021
I knew that this book was coming and jumped at the chance to read it.
Dranove is a economist at Northwestern and his co-author Burns is an organizational sociologist at Penn who specialized in healthcare organizations. The authors present a complex overview of the US healthcare system from a distinctive perspective – that the US healthcare system has evolved into a highly structured set of largely local or regional markets, each dominated by a relatively small number of integrated delivery networks (IDNs) and a comparable set of healthcare insurers. The prevalence of these systems, however, has not improvedthe performance of the system or of its members in terms of quality, cost, or access to medical care. US healthcare providers have learned how to consolidate into dominant local systems that have contributed to a strong pressure for high prices that generally exceed price levels in other healthcare systems globally but which has harmed US performance relative to the other national systems. This character of the US system is highly inertial, which frustrates reform efforts and perplexes practitioners who fail to understand its economic and organizational foundations. The authors Dranove seek to provide that understanding through a combination of economic and organizational analysis, supported by data and case study examples from their long research records.
This is a wonderful book but also a fairly complex ones. The arguments are complicated, as are the case situations covered in the book. The authors have done a good job presenting the material but readers should be warned that this is a book to be worked through carefully. Healthcare is an area where it is supremely easy to be woefully ill-informed on important details. The not only includes medical situations, but also the economic and legal issues that arise in healthcare antitrust cases. There are few authors who could have made this material as accessible as Dranove and Burns have.
Do the authors have all the answers to the policy, regulatory, and management issues affecting healthcare systems? No - although they provide their best suggestions and may well be on target on many of them. This is not a volume that follows a political ideology. Readers will be much better informed on healthcare policy debates if they work through this book. It is well worth the trouble.
Dranove is a economist at Northwestern and his co-author Burns is an organizational sociologist at Penn who specialized in healthcare organizations. The authors present a complex overview of the US healthcare system from a distinctive perspective – that the US healthcare system has evolved into a highly structured set of largely local or regional markets, each dominated by a relatively small number of integrated delivery networks (IDNs) and a comparable set of healthcare insurers. The prevalence of these systems, however, has not improvedthe performance of the system or of its members in terms of quality, cost, or access to medical care. US healthcare providers have learned how to consolidate into dominant local systems that have contributed to a strong pressure for high prices that generally exceed price levels in other healthcare systems globally but which has harmed US performance relative to the other national systems. This character of the US system is highly inertial, which frustrates reform efforts and perplexes practitioners who fail to understand its economic and organizational foundations. The authors Dranove seek to provide that understanding through a combination of economic and organizational analysis, supported by data and case study examples from their long research records.
This is a wonderful book but also a fairly complex ones. The arguments are complicated, as are the case situations covered in the book. The authors have done a good job presenting the material but readers should be warned that this is a book to be worked through carefully. Healthcare is an area where it is supremely easy to be woefully ill-informed on important details. The not only includes medical situations, but also the economic and legal issues that arise in healthcare antitrust cases. There are few authors who could have made this material as accessible as Dranove and Burns have.
Do the authors have all the answers to the policy, regulatory, and management issues affecting healthcare systems? No - although they provide their best suggestions and may well be on target on many of them. This is not a volume that follows a political ideology. Readers will be much better informed on healthcare policy debates if they work through this book. It is well worth the trouble.
May 25, 2022
Every health economist should read this book. As a matter of fact, everyone who is serious about addressing the biggest factor behind rising healthcare costs should read this book. David Dranove and Lawton Burns have been around a long time, and they explain how megaproviders are the cause of our costly and underperforming healthcare system. It helps that they explain the history of how we got here, examples from consolidating healthcare systems across the country, and the effect of various healthcare antitrust cases. The book is carefully researched, filled with facts and findings from top experts in health economics, healthcare management, and health policy. We learn how providers first tried to consolidate in an attempt to control costs by achieving economies of scale, but failed miserably. The second time they succeeded, because they realized they didn't have to control costs. They could raise prices instead! And the book makes it clear that for the most part, physicians are not to blame. They are instead the victims of manager/administrators who have become disconnected from the mission of compassionate care. The authors offer some helpful solutions that involve preserving competition among providers where it exists and modernizing our antitrust system. I would have liked them to discuss what I think is a better solution--getting employers and their workers to be better, smarter shoppers for healthcare. Providers won't behave competitively until they are forced to by their customers. Hopefully we'll figure out how to get that to happen before I retire.
May 20, 2024
As with non-fiction that I read more for work rather than pleasure I took a long time to finish this although the majority of time on my currently-reading list was spent just not reading it! Once I resumed reading after chapter 3, I finished it in 2 days because I had the time. With many books that came out recently, the research and writing was all pre-Covid pandemic. The epilogue of 2 pages mentions its disruption of health care and potential buyers market which I appreciate, but I would love further analysis of what has happened since.
I did appreciate the simplification of all the anti-trust cases and legislation and the players involved with the consolidation of health care into mega-providers. The status quo is powerful because it is so profitable for those big players and the pass-the-buck mentality for who's to blame for the high-cost of healthcare in the U.S. is easy to promote.
I did appreciate the simplification of all the anti-trust cases and legislation and the players involved with the consolidation of health care into mega-providers. The status quo is powerful because it is so profitable for those big players and the pass-the-buck mentality for who's to blame for the high-cost of healthcare in the U.S. is easy to promote.
August 3, 2021
Strong examination of health care industrial organization, including recent trends of provider consolidation and failed attempts at delivery system integration. Solutions chapters are short on grand solutions, but do offer marginal improvements to the current system.
August 24, 2021
Promising, but too expensive.
Displaying 1 - 5 of 5 reviews