No images? Click here Welcome to The Corner. In this issue, we discuss the dangers of health care monopolies — and how the VA hospital system can help to combat them.
Longman Testifies About How the VA Helps Fight Hospital Monopolies Open Markets’ policy director Phillip Longman (above) testified before the House Veterans Affairs Committee last week. Longman spoke about the vital role played by the Department of Veterans Affairs’ 1,700 hospitals, clinics, and other health care facilities in preserving competition in increasingly monopolized medical markets. In many metropolitan areas, the VA is the only remaining health provider that has not been absorbed by large corporate chains. The hearing took place in anticipation of a Biden administration proposal to spend $18 billion on rebuilding aging VA infrastructure, and amid fears that a soon-to-be appointed federal commission might recommend closing many VA facilities and privatizing more VA services. As Covid Leads to More Hospital Mergers, Officials May Be Waking Up to the Problem of Health Care Monopolies On Wednesday, a giant health care merger made headlines because it didn’t happen. Facing the threat of a lawsuit from North Carolina’s attorney general, Sentara Healthcare and Cone Health nixed their plan to become a vertically integrated $11.5 billion hospital/health insurance combine that would have dominated health care markets in Virginia and North Carolina. As with any man-bites-dog story, this nonmerger was newsworthy precisely because of its exceeding rarity. The trend toward concentration in hospitals is so strong that not even the coronavirus has been able to reverse it. Last year saw 79 hospital deals, down only slightly from 92 in 2019. Indeed, as The New York Times recently reported, much of the $178 billion in emergency Provider Relief Package money that the federal government spent during the early months of the pandemic wound up being used by the richest, most powerful hospitals to go on acquisition binges. At the time, Rep. Katie Porter (D-Calif.) was among a small group of lawmakers who called on then-Health and Human Services Secretary Alex Azar to ensure that the funds be awarded only to hospitals serving community interests and not to private equity-backed hospital systems. Now, Porter is calling on the Federal Trade Commission to hold hearings on the dispersal of the Provider Relief Package. “We are concerned, based on our review of mergers and acquisitions in 2020 and early 2021, that hospitals and health systems used these COVID-19 funds to finance mergers, rather than to care for patients or to maintain operations,” Porter and Rep. Rosa DeLauro (D-Conn.) wrote in a letter to FTC Acting Chairwoman Rebecca Kelly Slaughter and Health Secretary Xavier Becerra. The pair go on to express fear over the harm to consumers that hospital consolidation poses. U.S. consumers pay higher costs for poorer quality care than other developed countries. Although overuse is routinely cast as the culprit for this imbalance, an Open Markets’ 2019 report shows that consolidation is overwhelmingly at fault. Hospital markets in 90% of metro areas are highly concentrated. And extensive research evidence shows that such consolidation leads to substantial price increases for hospitals, insurers, and physicians, without offsetting gains in improved quality or enhanced efficiency. Consolidation has also led to massive numbers of hospital closures, particularly in rural and low-income urban neighborhoods. We may, however, finally be approaching an inflection point. Not only do we see state attorneys general like North Carolina’s Josh Stein beginning to use their broad statutory powers to block hospital mergers in their own backyards, but there are signs of a broad bipartisan consensus emerging at the national level. As Washington Monthly’s Eric Cortellessa recently wrote, Missouri Republican Sen. Josh Hawley and Connecticut Democrat Sen. Richard Blumenthal are rarely political allies, but at a recent Senate hearing they were “practically finishing each other’s sentences” as they questioned a panel of witnesses on the negative effects of concentration in the hospital market. Democrats and Republicans might not agree on much these days, but at least they increasingly agree that something needs to be done about the problem of monopoly in health care. 🔊 ANTI-MONOPOLY RISING:
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BARRY LYNN’S NEW BOOK
Liberty From All Masters The New American Autocracy vs. The Will of the People St. Martin’s Press has published Open Markets Executive Director Barry Lynn’s new book, Liberty from All Masters. Liberty is Lynn’s first book since 2010’s Cornered. In his new work, Lynn warns of the threat to liberty and democracy posed by Google, Amazon, and Facebook, because of their ability to manipulate the flows of information and business in America. Barry then details how Americans over the course of two centuries built a “System of Liberty,” and shows how we Americans can put this system to work again today. Lynn also offers a hopeful vision for how we can use anti-monopoly law to rebuild our society and our democracy from the ground up. Liberty from All Masters has already made waves for its empowering call to restore democracy by resurrecting forgotten tools and institutions. “Very few thinkers in recent years have done more to shift debate in Washington than Barry Lynn. In Liberty from All Masters, he proves himself as a lyrical theorist and a bold interpreter of history. This book is an elegant summoning of a forgotten tradition that can help the nation usher in a new freedom,” says Franklin Foer, author of World Without Mind and national correspondent for The Atlantic. You can order your copy of Lynn’s book here.
SALLY HUBBARD’S NEW BOOK
MONOPOLIES SUCK 7 Ways Big Corporations Rule Your Life and How to Take Back Control Simon & Schuster published Monopolies Suck by Sally Hubbard on Oct. 27. The book is the first by Hubbard, who is Open Markets’ director of enforcement strategy. Hubbard examines how modern monopolies rob Americans of a healthy food supply, the ability to care for the sick, and a habitable planet, because monopolies use business practices that deplete rather than generate. Monopolists also threaten fair elections, our free press, our privacy, and, ultimately, the American Dream, Hubbard shows. In Monopolies Suck, Hubbard reminds readers that antitrust enforcers already have the tools to dismantle corporate power and that decisive action must be taken before monopolies undermine our economy and democracy for generations to come. In Monopolies Suck, Sally provides an important new view of America’s monopoly crisis and of the political and economic harms of concentrated private power. Order your copy here. 🔎 TIPS? COMMENTS? SUGGESTIONS? We would love to hear from you—just reply to this e-mail and drop us a line. Give us your feedback, alert us to competition policy news, or let us know your favorite story from this issue. |