One of the mantras behind passage of the Affordable Care Act was that it would somehow increase competition, lowering health care prices.
This hasn’t happened. Instead, a wave of anti-competitive consolidation has been encouraged. Hospitals have been buying other hospitals or entering into controlling “strategic affiliations” — as was true when Swedish Health Services joined forces with Providence in 2012.
Much concern about hospital consolidation in Washington has centered upon Catholic-based systems limiting reproductive rights, but there are broader implications. Research shows consolidation drives costs upward. Hospitals now own most physician practices, and that, too, increases costs.
Now even Colorado-based DaVita — previously in the kidney dialysis business — is buying the Everett Clinic. The scale of entities created under the ACA is so large a company like DaVita can easily, as it did last year, pay out $495 million in a Medicare fraud settlement and still afford to purchase our state’s largest independent medical practice group, serving more than 318,000 patients with over 2,000 employees. Why merge? We’re told it facilitates “massive expansion” — a concept better-suited to a medical arms race than patient accountability.
Many of these maneuvers should implicate federal antitrust laws, but the federal government has not intervened — perhaps for fear of acknowledging the inexorable empire-building and profiteering unleashed by the ACA is not entirely benevolent.
Insurers are getting in on the act, too. Wanting to compete with giant UnitedHealth Group, which paid its CEO $66.1 million last year, Anthem is gobbling up Cigna for $54 billion, while Aetna is devouring Humana for $37 billion. Insurers are protected by state-based regulation from federal antitrust enforcement. If the ACA-era marketplace is dominated by fewer carriers, however, the “more competition” claim used to kill a public option will be exposed as a lie.
ACA defenders crow that the state’s Healthplanfinder exchange will have 12 different carriers. But there is less to this than meets the eye:
Four of the 12 are owned by two companies;
Only three of the 12 offer coverage in all 39 counties; and
Only five (one owned by another) of the 12 offer coverage in as many as 22 counties.
ACA defenders also effused that 2016 individual market rate increases will be lower than other states. That’s faint praise. Some huge increases are coming — as high deductibles, narrow networks, and denying care to the autistic (until private litigation stopped that) evidently were not profitable enough. Moda got a 16.5 percent increase (naming rights for the Portland Trailblazers’ arena cost $40 million, after all). RegenceBlueshield received a 10 percent increase, and its subsidiary, BridgeSpan, got a 14.1 percent increase. Premera’s increase was 8.8 percent. These increases far outpace personal income growth, as is also true on the employer-supplied side, where bankrupting high-deductible plans are becoming normal.
To be troubled by these trends is not to oppose health care access for all, but, rather, to note that much more must be done to make health care truly accessible and affordable in our state.
Brendan Williams, an Olympia attorney, is a former state representative (2005-10) and national health care writer.
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