Trade-off of the day: Efficiency vs Care

NYT reports about the growing industrialization of healthcare in the US:

As recently as 2005, more than two-thirds of medical practices were physician-owned — a share that had been relatively constant for many years, according to the Medical Group Management Association. But within three years, that share dropped below 50 percent, and analysts say the slide in physician ownership has continued.


For patients, the transformation in medicine is a mixed blessing. Ideally, bigger health care organizations can provide better, more coordinated care. But the intimacy of longstanding doctor-patient relationships may be going the way of the house call.

I think deployment of IT in healthcare is likely to increase. Small practice doctors will have harder time competing with large hospitals not only because they'll have weaker position negotiating with the government, but also, due to the economies of scale/scope effects, their malpractice insurance premiums will be higher and return on IT investments lower.