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WHAT HARRIS’ BID TO END MEDICAL DEBT TELLS US ABOUT HER VIEW OF
CORPORATE PRICE GOUGING  
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Chuck Idelson
August 17, 2024
Common Dreams
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_ For-profit hospitals jacking up prices matches a similar story of
predatory corporate practices on grocery costs and housing prices.
It's not market supply and demand. Corporate giants have figured out
how to rip people off more effectively. _

Democratic U.S. presidential candidate Vice President Kamala Harris
speaks on her policy platform, including improving the cost of living
for all Americans, at the Hendrick Center For Automotive Excellence on
August 16, 2024 in Raleigh, North Carolina. , Grant Baldwin/Getty
Images

 

Vice President Kamala Harris’ bold proposal to eliminate medical
debt offers a window into the approach that informs the entire
progressive economic agenda the Democratic nominee for President
unveiled August 16.

In addition to the proposals for re-instating and expanding the child
tax credit with a baby bonus for new parents, federal support for
affordable housing construction and a subsidy down payment for first
time home buyers, much of the new focus and attacks have centered on
what the _Washington Post_
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the “first ever” ban on price gouging for groceries and food.

What makes that idea especially noteworthy is its correlation to the
medical debt plan and caps on prescription drug costs and rent
increases. A central cause of those inflated costs goes well beyond
the usual claims of supply chain bottlenecks, government spending on
social programs, and the disruption of the pandemic. In every case,
there is a direct link to monopolization and big corporations
exploiting those factors to jack up charges to extract higher, often
record, profits, well beyond their own costs to produce or provide
them.

Unpacking the crisis and main source of medical debt as well as for
health care costs overall, including for prescription drugs, provides
the tell.

For over two decades California Nurses Association/National Nurses
United researchers have studied how hospitals inflate charges over
their costs. Overall, the conclusion has been that hospital profit
taking, augmented by corporate mergers, is a clear driver of medical
debt.

A 2020 NNU study
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that some hospitals had hiked their charges by as much as 18 times
over their costs, exploding profits by 411 percent over the prior two
decades. NNU’s forthcoming update on hospital charges will show that
some hospitals by 2022/2023 were now setting charges at almost 24
times over their costs, doubling their charges over the past 20 years.
Further, the biggest for-profit hospital chains set the highest prices
and make the most profits from them. Among the 100 top hospitals with
the highest charges, hospital giant HCA had six hospitals alone with a
combined profit of almost $400 million for that fiscal year.

Big Pharma is the gold medal winner in profiteering which is why drug
costs have become such a national scandal. The U.S. Senate Health,
Education, Labor, and Pensions (HELP) Committee, chaired by
Sen. Bernie Sanders
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Staff Report
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February documenting how three of the biggest pharmaceutical giants,
Johnson & Johnson (J&J), Merck, and Bristol Myers Squibb (BMS), have
prioritized profits over patient need, collectively piling up $112
billion in profits in 2022 through “unethical pricing strategies,
relentless price hikes, manipulative patent tactics, and extensive
lobbying efforts.”

That lobbying blocked years of efforts to allow Medicare to use its
bulk purchasing power to negotiate lower drug prices, as most other
industrial countries have achieved. It’s why President Biden’s
Inflation Reduction Act to permit Medicare to bargain lower prices for
10 of the highest cost drugs that treat heart disease, cancer,
diabetes, and blood clots was such a dramatic success
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The White House this week announced it will save millions of Medicare
recipients $1.5 billion in the first year of the program.

Grocery and housing prices

There’s a similar story of predatory corporate practices on grocery
and housing prices. No they’re not just set by market supply and
demand. “Is Harris right on the economics?” asked
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economist Robert Kuttner on Friday in response to the announcement of
Harris' plan.

"A detailed study by Groundwork Collaborative
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that corporate concentration and increased profits accounted for more
than half of the inflation felt by consumers in 2022 and 2023,"
Kuttner wrote. "First, it vividly connects with the issue of inflation
where ordinary people feel it… Second, the plan reframes the issue
… to how corporate concentration opportunistically drives price
hikes…Third, the approach recasts the struggle as ordinary people
vs. predatory corporations.”

“Today, everywhere consumers turn, whether they are shopping for
groceries at the local Kroger or for plane tickets online, they are
being gouged,” wrote David Dayan and Lindsay Owens
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lead to a major _American Prospect_ series in June. “Landlords are
quietly utilizing new software to band together and raise rents.”

In the “40 years from 1979 to 2019, nonfinancial corporate profits
cumulatively drove about 11.4 percent of price growth
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From April to September of last year,” Dayan and Owens continued,
“that number was 53 percent
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Factors include corporate concentration, high-tech pricing practices,
utilizing “technological innovations such as cloud computing,
artificial intelligence, and surveillance targeting” of consumers to
collect extensive personal information.

Jarod Facundo described
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panoply of corporate grocery pricing practices including dominance of
shelf space by the biggest chains, surge pricing, repackaging goods
without changing prices, and tech driven personalizing pricing “for
each shopping cart” that have been “the path to higher margins,”
increased costs, and, of course, bigger profits.

Food company profit increases since inflation peaked
[[link removed]], notes former labor
secretary Robert Reich, include Cal-Maine, the largest U.S. producer
and distributor of fresh shell eggs, whose profits soared 471 percent.
Monopolization has also driven food inflation, Reich says: Just four
companies control
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processing, 80 percent of corn seed distribution, 77 percent of
fertilizer production, and 69 percent of grocery sales.

In an investigative report in October, 2022, _ProPublica_’s Heather
Vogell described
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Texas-based RealPage’s software facilitated price inflation on
rental units. “Property managers across the United States have
gushed about how the company’s algorithm boosts profits
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wrote. “The nation’s largest property management company,
Greystar, used the software to price tens of thousands of apartments
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In the _American Prospect_, Luke Goldstein also zeroed in
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the effect of RealPage’s practices to “maximize profits” in
rental markets. “Clients accept the RealPage recommendations over 80
percent of the time, and the company includes provisions in its
contracts to ensure rent hikes. It heavily pushes adoption to new
clients of an ‘auto-accept’ feature that forces price increases
automatically.”

Corporate price gouging has not gone unnoticed by the Biden
administration, as Dayen and Owens note, citing the work of its
agencies to aggressively target algorithmic price-fixing, corporate
mergers and other practices, such as junk fees and corporate care
interest rates that spark inflation.

Harris has been a voice on those initiatives as well, which have
contributed to her economic proposals today. The proposals will face
considerable assault from corporate lobbyists and the politicians they
influence, of course, which will require a lot of political organizing
to support.

Among those praising her initiative was Sen. Sanders, as staff writer
Jake Johnson reported
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for _Common Dreams_. Sanders called the Harris plan “an important
step forward in making our country a fairer and more just society. I
look forward to working with Vice President Harris when she becomes
president to implement her economic agenda, and more, within her first
100 days in office."

CHUCK IDELSON is the Communications Senior Strategist for National
Nurses United, the nation's largest union and professional
organization of registered nurses with 175,000 members.

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* medical debt
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* corporate profits
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* monopolies
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* hospitals
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* Big Pharma
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