Health Care — A Monopoly of Monsters

• Americans pay twice as much for their health care yet get the worst care of any developed Western nation. And, while other countries guarantee treatment regardless of income, treatment in the U.S. depends on whether you can afford costly health insurance, or have a job that provides it
• Nearly 70% of Americans support a Medicare for all scheme over the current health insurance system and making health care affordable was the second-highest priority of Americans in a 2022 poll. Medicaid will terminate benefits for an estimated 15 million Americans once the public health emergency ends
• One of the reasons why U.S. health care is so exorbitantly expensive is because it’s a conglomerate of monopolies. This results in higher costs while discouraging innovation and efficiency optimization
• Strategies that could lower costs and improve care include leveraging economies of scale, offering hospital services seven days a week, and providing at-home health care services
• Another thing that could go a long way toward improving medical outcomes and lowering patient costs is banning drug ads, especially in electronic health record (EHR) systems and patient portals, as such ads drive up costs and result in poor prescribing decisions that put patients at risk

As noted by The Hill’s anchor Briahna Joy Gray in the video above, Americans pay twice as much for their health care yet get the worst care of any developed Western nation. And, while other countries guarantee treatment regardless of income, treatment in the U.S. depends on whether you can afford costly health insurance, or have a job that provides it.

According to polls cited by Gray, nearly 70% of Americans support a Medicare for all scheme over the current health insurance system, and making health care affordable was the second-highest priority of Americans in a 2022 poll.

15 Million Americans Will Soon Lose Medicaid Benefits

Concerns about the cost of health care are likely to increase even further once Medicaid starts terminating benefits for an estimated 15 million Americans, which is expected to begin in April 2023. These were people who qualified for Medicaid and/or the Children’s Health Insurance Program (CHIP) coverage during the pandemic emergency.¹ Once the public health emergency (PHE) ends, this coverage will be rescinded.

“Are we really going to go back to letting 68,000 people die each year simply because they’re too poor to live?” Gray asks. President Biden campaigned on a public option for health care, but that promise has yet to come to fruition — possibly because he took more money from the health insurance industry than any previous president.

Former President Obama folded when it came to a public option after the industry lobbied hard to prevent it, and while so-called “Obamacare” promised to be an affordable option, health insurance prices and industry profits soared once the Affordable Care Act was enacted.

Since people were financially penalized for not having insurance, insurance companies took advantage and raised prices across the board, even though we were promised that wouldn’t happen.

The public option would (allegedly) allow Americans to purchase a government-backed Medicaid-like plan at a competitive price. The idea is that government would not seek to make a profit on the public option in the way private health insurers do.

US Health Care Is a Conglomerate of Monopolies

There are many reasons for why U.S. health care is so exorbitantly expensive, but one of them is because it’s a monopoly or, as Dr. Robert Pearl, former CEO of The Permanente Group, describes it, “a conglomerate of monopolies.” In a January 16, 2023, Forbes article, he writes:²

“In any industry, market consolidation limits competition, choice and access to goods and services, all of which drive up prices. But there’s another — often overlooked — consequence. Market leaders that grow too powerful become complacent. And, when that happens, innovation dies.

Healthcare offers a prime example. De facto monopolies abound in almost every healthcare sector: Hospitals and health systems, drug and device manufacturers, and doctors backed by private equity. The result is that U.S. healthcare has become a conglomerate of monopolies.

For two decades, this intense concentration of power has inflicted harm on patients, communities and the health of the nation. For most of the 21st century, medical costs have risen faster than overall inflation, America’s life expectancy (and overall health) has stagnated, and the pace of innovation has slowed to a crawl …

[M]erged hospitals and powerful health systems have raised the price, lowered the quality and decreased the convenience of American medicine.”

According to Pearl, 40 of our largest health care systems combined own 2,073 different hospitals. That’s approximately one-third of all emergency and acute care facilities in the country. The top 10 health care systems combined own one-sixth of all hospitals and have an annual net revenue of $226.7 billion.

While there are all sorts of antitrust and anticompetitive laws on the books, “legal loopholes and intense lobbying continue to spur hospital consolidation,” Pearl says. As a result of all this consolidating, hundreds of communities have just one option for inpatient care. This means there’s no competition in terms of pricing, so prices tend to go up, while quality of care often declines since patients can’t complain and go elsewhere.