Free-Market Medicine: The Role of the Large Medical Firm

by Michel Accad

There is a common misconception that if healthcare operated under free market conditions, it would primarily be a cottage industry of solo practices and of small physician-owned hospitals. Such operations would not develop the capabilities of large healthcare entities that we commonly associate with central planning.

In reality, however, the opposite would be the case. If healthcare were unregulated, many physicians would ultimately become employees in large organizations because patient demands for better and more specialized care would foster the emergence of large medical firms that would accelerate an effective and innovative division of labor. Economist Per Bylund has elaborated a general theory of the development of the firm along those lines.

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