Physician-owned practices have fallen from over half in 2012 to roughly a third today, as independent doctors sell into hospitals, health systems, and private equity at a record pace. (AMA) By ownership structure, American healthcare has never been less fragmented.

We don't think that solved anything. Consolidation changed who owns healthcare. It didn't touch how it gets paid for or how it communicates — and those are the two problems actually driving the cost and friction everyone feels.

The Incentive Problem Didn't Go Away, It Just Changed Owners

Most of the newly consolidated organizations still run on fee-for-service: reimbursed per procedure, per visit, per test, regardless of whether any of it made a patient healthier. Studies estimate up to 30% of spending in fee-for-service systems goes toward unnecessary or low-value services — not because clinicians are careless, but because the payment model rewards volume, not outcomes.

Rolling independent practices into larger systems didn't change that math. It just moved the piecemeal billing into a bigger building. Physician and author Robert Pearl, formerly COO of Kaiser Permanente's Permanente Medical Group, has spent years calling this out — describing the reimbursement model as "a 19th-century cottage industry kind of way" of paying for care. The label is memorable, but the mechanism is what matters: the incentive structure never got a seat at the consolidation table.

The Technology Is Still a Cottage Industry, Too

The infrastructure tells the same story, and arguably a worse one. Roughly 70% of all healthcare communication in the U.S. still happens by fax, rising closer to 90% once fax traffic flowing in and out of EHRs is included. (HIMSS / TigerConnect) Nearly 9 in 10 hospitals report relying on fax machines to move information across departments, referrals, and outside partners. (Becker's Hospital Review)

That's not nostalgia — it's a network effect. A hospital can modernize its own systems and still be stuck faxing a specialist, a court, or an insurer who hasn't. The result is measurable: communication breakdowns like these are estimated to cost the average hospital more than $4 million a year.

Bigger Buildings, Same Bottlenecks

Put the two problems together and a pattern emerges: healthcare organizations got bigger, but the operational layer underneath them — how work gets communicated, tracked, and paid for — never got a matching upgrade. A 200-bed hospital system today can have more consolidated ownership than the doctor's office down the street did in 1995, and still run daily operations on the same disconnected mix of phone calls, fax cover sheets, and spreadsheets.

That gap is exactly where administrative burden compounds. Every layer of consolidation without a matching operations upgrade adds more handoffs, not fewer — more departments that need to coordinate, more systems that don't talk to each other, more piecemeal billing to reconcile.

Consolidation Without Modernization Is Half a Fix

None of this is an argument against consolidation, and it's not a claim that any single tool solves reimbursement reform. It's an observation that ownership structure and operational infrastructure are two different problems, and healthcare has been treating a fix to one as a fix to both.

Hospitals and health systems that actually close the gap are the ones investing in the unglamorous middle layer — the rounding, scheduling, policy management, and task tracking that consolidation alone doesn't touch. That's the layer MCCore is built for: not replacing the EHR or reforming how care gets billed, but giving the people running day-to-day operations a system that matches the size of the organization they're actually working in now.