When a large company is successful, one reason often cited is "economies of scale." The benefit of being big is that costs are spread across, or "scale" to cover, more and more situations. A doctor needs the same number of IT systems, buildings, and equipment to see 1,000 patients as she does to see the first patient -- and if she has 1,000 patients, she's more likely to get a good price on supplies. Administrative costs scale, too; the cost of managers doesn't increase with each patient who comes through the door.
Historically, the U.S. healthcare system hasn't worried much about scale, because reimbursements from insurers were based on the number of patients seen. Passage of the Affordable Care Act in 2010 began to change this "fee-for-service" model and accelerated the adoption of "value-based care," or reimbursements based on the quality and cost of the service provided. In response, the healthcare industry has been consolidating at a rapid pace; there were more than 80 mergers in both 2018 and 2019. For perspective, there were only 50 and 60 similar transactions in 2009 and 2008, respectively.
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