Is bigger always better? The optimal size of a group practice

Research output: Contribution to journalArticle

Abstract

The past decade saw several attempts to consolidate physician practices, but this sector remains one of the last cottage indusries in the United States. This article develops a framework for analyzing the optimal size of a physician practice. The framework addresses technological factors (e.g., economies of scale and scope), behavioral factors (e.g., changing physician goals, costs of organizing and operating a practice), and market-riven factors (e.g., managed care contracting). Existing empirical research suggests three "optimal" sizes of practices: 5-10 physicians, based on economies of scale and decision-making; 20-30 physicians, based on economies of scope and initial development of a corporate structure; and 80+ (multi-specialty) physicians, which can create an system of referrals and utilization. The article concludes with observations about the challenges to physician practices as they grow.

Original languageEnglish (US)
Pages (from-to)312-318
Number of pages7
JournalJournal of Medical Practice Management
Volume17
Issue number6
StatePublished - 2002

Fingerprint

Group Practice
Physicians
Empirical Research
Managed Care Programs
Decision Making
Referral and Consultation
Costs and Cost Analysis

Keywords

  • Economies of scale
  • Physician practice
  • Practice growth

ASJC Scopus subject areas

  • Medicine (miscellaneous)

Cite this

Is bigger always better? The optimal size of a group practice. / Hough, Douglas Earle.

In: Journal of Medical Practice Management, Vol. 17, No. 6, 2002, p. 312-318.

Research output: Contribution to journalArticle

@article{642a9c814e2e48ec8fd970497aac4fde,
title = "Is bigger always better? The optimal size of a group practice",
abstract = "The past decade saw several attempts to consolidate physician practices, but this sector remains one of the last cottage indusries in the United States. This article develops a framework for analyzing the optimal size of a physician practice. The framework addresses technological factors (e.g., economies of scale and scope), behavioral factors (e.g., changing physician goals, costs of organizing and operating a practice), and market-riven factors (e.g., managed care contracting). Existing empirical research suggests three {"}optimal{"} sizes of practices: 5-10 physicians, based on economies of scale and decision-making; 20-30 physicians, based on economies of scope and initial development of a corporate structure; and 80+ (multi-specialty) physicians, which can create an system of referrals and utilization. The article concludes with observations about the challenges to physician practices as they grow.",
keywords = "Economies of scale, Physician practice, Practice growth",
author = "Hough, {Douglas Earle}",
year = "2002",
language = "English (US)",
volume = "17",
pages = "312--318",
journal = "Journal of Medical Practice Management",
issn = "8755-0229",
publisher = "Greenbranch Publishing LLC",
number = "6",

}

TY - JOUR

T1 - Is bigger always better? The optimal size of a group practice

AU - Hough, Douglas Earle

PY - 2002

Y1 - 2002

N2 - The past decade saw several attempts to consolidate physician practices, but this sector remains one of the last cottage indusries in the United States. This article develops a framework for analyzing the optimal size of a physician practice. The framework addresses technological factors (e.g., economies of scale and scope), behavioral factors (e.g., changing physician goals, costs of organizing and operating a practice), and market-riven factors (e.g., managed care contracting). Existing empirical research suggests three "optimal" sizes of practices: 5-10 physicians, based on economies of scale and decision-making; 20-30 physicians, based on economies of scope and initial development of a corporate structure; and 80+ (multi-specialty) physicians, which can create an system of referrals and utilization. The article concludes with observations about the challenges to physician practices as they grow.

AB - The past decade saw several attempts to consolidate physician practices, but this sector remains one of the last cottage indusries in the United States. This article develops a framework for analyzing the optimal size of a physician practice. The framework addresses technological factors (e.g., economies of scale and scope), behavioral factors (e.g., changing physician goals, costs of organizing and operating a practice), and market-riven factors (e.g., managed care contracting). Existing empirical research suggests three "optimal" sizes of practices: 5-10 physicians, based on economies of scale and decision-making; 20-30 physicians, based on economies of scope and initial development of a corporate structure; and 80+ (multi-specialty) physicians, which can create an system of referrals and utilization. The article concludes with observations about the challenges to physician practices as they grow.

KW - Economies of scale

KW - Physician practice

KW - Practice growth

UR - http://www.scopus.com/inward/record.url?scp=0036283932&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=0036283932&partnerID=8YFLogxK

M3 - Article

C2 - 12122818

AN - SCOPUS:0036283932

VL - 17

SP - 312

EP - 318

JO - Journal of Medical Practice Management

JF - Journal of Medical Practice Management

SN - 8755-0229

IS - 6

ER -