We have become accustomed to thinking that bigger systems are stronger systems. In healthcare, consolidation is often justified by the promise of greater efficiency, coordination, purchasing power and scale. And sometimes scale does provide real advantages, but efficiency and resilience are not the same thing.
That key difference has been on my mind since I started thinking about an unlikely example, cryptocurrency. It wasn’t the investment, the politics or the hype that struck me. It was the architecture behind it. Cryptocurrency was designed as a distributed system, maintained across many independent participants rather than controlled by a single central authority. Redundancy is intentional. If one node fails, the network does not.
Cryptocurrency is hardly the only place we see this principle. Resilient infrastructure often depends on some combination of distribution, redundancy, and alternative pathways. We build those qualities into communications networks, energy systems, supply chains and other systems we cannot afford to have fail. Yet in American healthcare, we have spent decades moving in the opposite direction.
Hospitals, corporate entities, and large health systems have steadily consolidated control over care. Independent practices have been absorbed, and physicians have increasingly shifted from owners to employees. Decision-making has moved farther away from individual physicians, patients, and communities.
We have largely treated this as an economic and organizational question- which model is more efficient? Which has greater negotiating leverage? Which can achieve greater scale? But what kind of healthcare system is most resilient? That’s the question we are missing entirely.
As care delivery, staffing, capital and infrastructure become concentrated within fewer organizations, those organizations become points of concentrated dependence. When one falters — financially, operationally, or clinically — the consequences can ripple through an entire community.
We already see what happens when local healthcare capacity disappears. The Commonwealth Fund reports that nearly 200 rural hospitals have completely or partially closed since 2005, with more than 400 currently at risk of closure. Chartis reports that 46% of rural hospitals operate with negative margins and 432 are vulnerable to closure. USDA data similarly document the continued loss of inpatient hospital services in rural communities.
We ran that experiment recently. During COVID, the public health message was to stay away from the hospital, and patients did exactly that. But staying away only works if there is somewhere else to go — and for a great many people there was no where to go. Visits were postponed, symptoms went unevaluated, screenings were skipped, and chronic conditions drifted. The problem was not only that hospitals were overwhelmed, but that we had spent years consolidating care into the very places we were telling people to avoid, and too few alternatives remained to absorb what was displaced. Patients did not simply go elsewhere. Many went without.
A hospital is not interchangeable with a physician practice, of course, but the underlying infrastructure question is the same: What remains when a source of local capacity disappears?
That is precisely where independent medicine deserves a different place in the policy conversation. Independent medical practices are usually discussed as businesses- and they are businesses — but that description is incomplete as they are also infrastructure. An independent practice creates another access point for patients, another source of clinical capacity within a community, and another place where medical decisions can be made outside the governance of a dominant institution. It gives physicians another way to practice and patients another place to receive care.
A recent Health Affairs analysis of independent physician groups found that many remained viable through local governance, physician leadership, and flexible affiliations rather than full absorption into hospital systems. That is the strange thing about redundancy. In a system operating normally, it can look inefficient. Its value becomes apparent when something changes.
A hospital eliminates a service line. A health system retrenches. A corporate owner changes strategy. A community loses a facility. A physician disagrees with an administrative decision. A patient needs another option.
The value of independent capacity goes so far beyond competing with larger systems. It is that it preserves optionality within the system itself. Once viewed that way, physician independence stops being a nostalgic argument about how medicine used to be practiced. It becomes a legitimate policy question about what kind of healthcare infrastructure we want to preserve. And policy currently matters enormously to whether that infrastructure survives.
Payment and regulatory dynamics can place small independent practices at a disadvantage relative to hospital-owned settings, strengthening the economic logic of consolidation. Site-of-service payment differences, for example, can result in higher reimbursement for services delivered through hospital-owned outpatient departments than for comparable services delivered independently.
If we believe distributed capacity has value, we should stop designing incentives that systematically make that capacity harder to sustain. This could mean reducing site-of-service payment distortions. It could mean making capital and technical support more accessible to independent practices, particularly in rural and underserved communities. Large systems can spread the costs of health IT, reporting requirements, contracting and compliance across enormous organizations. Small practices cannot.
It also means thinking differently about physician placement. Loan repayment, rural training opportunities and targeted recruitment are generally discussed as workforce strategies, but every sustainable independent practice created in an underserved community is also another node of local healthcare capacity.
None of this is an argument against hospitals or large health systems. Hospitals are indispensable. Trauma care, intensive care, advanced imaging, complex surgery, and countless other services require resources and scale that small organizations cannot provide.
The question is whether it is wise to build a healthcare system that depends almost entirely upon large systems.
E.F. Schumacher wrote about the importance of “smallness within bigness”- the idea that large organizations can gain efficiency without eliminating the smaller units that preserve adaptability and human-scale accountability. That feels increasingly relevant to medicine. We do not have to choose between scale and independence. A resilient healthcare system can contain both.
It can have major academic centers and community hospitals. Large multispecialty organizations and small physician-owned practices. Highly integrated systems and independent access points. The redundancy may occasionally look inefficient on a spreadsheet. That does not mean it lacks value.
We insure buildings we hope will never burn. We maintain backup systems we hope never to use. We build redundancy into infrastructure precisely because optimizing everything for ordinary conditions can leave us dangerously exposed when conditions stop being ordinary.
Healthcare deserves the same thinking. Once independent medical capacity disappears, it is not easily recreated. Practices require physicians willing to build them, capital to launch them, patients to sustain them, and a regulatory and payment environment in which they can survive.
By its very definition, resilience is not tested when everything is working- only when something fails.
Independent medicine gives patients, physicians, and communities another place to turn when it does. That makes it more than a business model worth preserving. It makes it part of America’s healthcare infrastructure.
Dr. Hochman is a double board-certified facial plastic and reconstructive surgeon and the founder of The Facial Surgery Center in Charleston, S.C., and Hochman Private Practice Advisory. He previously served as president of the Independent Doctors of South Carolina and president of the Charleston County Medical Society. Dr. Hochman can be reached directly at DrHochman@FacialSurgeryCenter.com.
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