Some see the future for hospital based groups in the context of large versus small, often stating that groups need to merge to achieve significant size or simply sell out to so-called national groups. It not clear whether “sell out” means to be acquired or is simply a colloquial expression.
But large groups are like walruses in that when they get bigger they may more easily attract a mate, but what they gain in that respect is offset by the fact that growing too big makes them too slow to avoid predators.
The issue really is not large group vs. small — large does not equal better and small does not equal better; only better equals better. The issue is what any group must do to increase the odds of its business success and relationship longevity, and that’s to create a unique experience, what I refer to as an “experience monopoly” tailored to each hospital that the group serves.
The “franchise operation” approach of large groups gives them an advantage in managing far flung outposts. But that blessing is a curse in that they become too unwieldy and bureaucratic to ever truly deliver an experience monopoly.
At the same time, most small groups are too unstructured to provide it.
Groups of both sizes may be doomed. Groups of both sizes may be successful. Size in this instance doesn’t matter. Better does.
Comment or contact me if you’d like to discuss this post.
Mark F. Weiss