Strict Antitrust Review for Health Insurers, Hospitals
As Obamacare accelerates the transformation of the U.S. health sector into a complex of regulated utilities, providers are concentrating into oligopolies. The Wall Street Journal reports that the U.S. Department of Justice will use “strict review” when considering mergers of health insurers, while the Federal Trade Commission will also review hospital mergers closely:
The prospect of consolidation poses high stakes for the Obama administration, whose signature domestic policy legacy is the 2010 health-care law. Some aspects of the health law were designed to increase insurance-industry competition, including marketplaces for health coverage and the creation of new nonprofit cooperative health plans around the country.
But the law also includes provisions that may have helped inspire consolidation, at least indirectly.
(B. Kendall & A. Wilde Mathews, “DOJ Girds for Strict Review of Any Health-Insurers Mergers,” Wall Street Journal, June 28, 2015)
It is disappointing the WSJ journalists swallowed the administration’s line about “marketplaces” (Obamacare’s exchanges) and the cooperative health plans (COOPs) increasing competition. The exchanges are bloated bureaucracies that make no more sense than giving the DMV a monopoly to sell auto insurance, or HUD a monopoly to sell homeowners’ insurance. And the COOPs are going bust, taking millions of taxpayers’ dollars with them.
It should surprise nobody that when the federal government takes over an industry, it consolidates into oligopolies. The question is, when Obamacare conflicts with antitrust law, which will prevail? Now that we are in a brave new world where judges re-write laws according to their beliefs about prevailing political sentiment, as opposed to actual statute, the outcome is anybody’s guess.
