Do You Know How to Play Monopoly?
Will the consolidations that are being caused by the new health reform law undermine efforts at cost control?
That’s exactly what happened in California over the last decade after hospitals merged and physicians joined large independent practices to counter the price-dictating bargaining power of insurance industry HMOs. The number of hospital beds shrank, hospital prices doubled and overall health care costs rose 10.6 percent between 1999 and 2005, which was even higher than the unacceptably high national health care inflation, according to a recent study of the California market.
This is only the beginning. It is going to get much worse.
Agree with Tom. You ain’t seen nothing yet.
Over time competition will be whittled away until there are only a couple dominant insurers in each region. In an effort to prevent dominant insurers from acting like bilateral monopolies, large hospital systems will consolidate and sign management agreements with smaller area hospitals to function as one large health care system. The end result will be higher prices for employers, enrollees and patients.
Hospital network monopolists have also raised costs in parts of Wisconsin.
But under the ObamaCare rules, only health care, not health policy, must be evidence-based, and the evidence to date supports the conclusion that ObamaCare is designed to destroy private medicine and the private financing of it.
Linda, Obama care is designed to push people into ACOs, which by definition have to be large HMOs. When they are through there will be huge consolidation on the supply side of the market.
For what it’s worth, there will also be only two or three insurers left standing, if that.
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