Is Bigger Healthcare Better?

Philip Betbeze, for HealthLeaders Media , April 13, 2012

"It says, in part, that the hospital is very dependent on government programs, which means there's high risk because of budget cuts, which will reduce the amount of revenue," Lupica says. "That was 1992, and was written about what is now a very successful system. So the risks are always there. The alphabet soup changes."

Lupica decries the "experts" who "run around the country, saying—and they may actually believe this—that the days of the county or freestanding hospital are over, that everyone needs more scale, that it's all about how big you are, that healthcare reform is tough and risks are huge," he says.

"But let's think about that. Business has to thrive in risk; that's what drives business. Just saying there's risk is a tautology."

Lupica warns chief executives and board members to be wary of such advice.

"When you carry a business card that says ‘we do mergers,' you have a duty to be very careful with your words."

Here's where I pushed back a bit. Size and scale, at least to a certain extent, seem to limit organizations' ability to participate in pilot projects with payers and certainly with CMS, in participating in some of the more innovative, reimbursement regimes that require providers to take on risk. If you can't do them on a small scale, your opportunity for institutional learning is greatly reduced.

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