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:roll: i remember the legions endlessly repeating the mantra that "obamacare will increase competition"; the president himself made the claim though he knew it to be false. in vain did we point out that the mechanics of the bill would do the exact opposite.
well, now we can see
ObamaCare's once and future harms have been well chronicled, but the major effects so far are less obvious and arguably more important: A wave of consolidation is washing over the health markets, and the result is going to be higher costs.
The turn toward consolidation among insurance companies is not new, and neither is it among doctors, hospitals and other providers. Yet the health bill has accelerated these trends, as all sides race to anticipate and manage political risk and regulatory uncertainty. This dynamic is leading to much larger hospital systems and physician groups, and fewer insurers dominated by a handful of national conglomerates. ObamaCare was sold using the language of choice and competition, but it is actually reducing both.
he first surge will come among the 1,200 insurers doing business in the U.S., given that a major goal of ObamaCare is to convert these companies into de facto public utilities. Those regulations are now being written—and once they're up and running some medium-sized carriers will collapse under the new mandates and higher overhead. State insurance commissioners warned the Administration this month that "improper or overly strident application . . . could threaten the solvency of insurers or significantly reduce competition in some insurance markets." They also implied that bankruptcies are likely...
This trend got a preview two weeks ago when Mercy Health Partners announced that it was seeking buyers for three Catholic hospitals in northeast Pennsylvania. CEO Kevin Cook told local media that ObamaCare was "absolutely" a factor in the decision to sell, only to backtrack once his comments were used in campaign ads against House Democrats Paul Kanjorski and Chris Carney, who voted for the bill.
Though it received little attention over a year of debate, ObamaCare actively promotes provider consolidation. Writing this summer in the Annals of Internal Medicine, Nancy-Ann DeParle and other White House health advisers argued that "The economic forces put in motion by the Act are likely to lead to vertical organization of providers and accelerate physician employment by hospitals and aggregation into larger physician groups."..
Hospitals are now on a buying spree of private physician practices in the rush to build something that will qualify as an ACO. Some 65% of doctors who changed jobs in 2009 moved into a hospital-owned practice, while 49% of doctors out of residency were hired by hospitals, according to the Medical Group Management Association. In its 2010 census, the American College of Cardiology reports that nearly 40% of private cardiology groups are currently integrating with hospitals or merging with other practices.
Doctors are selling because complying with the ever-growing list of mandates has become more cumbersome; and while staff physicians on salary do gain predictability, they also lose the autonomy of independent practice. The other problem is price controls in Medicare, which are about 20% below private payments for doctors and 30% lower for hospitals. Hospitals are also scooping up practices to lock in referral sources and make up for ObamaCare's Medicare cuts. As it is, two-thirds of hospitals lose money today on Medicare inpatient services, according to Medicare...
"In a lot of states, the problem is just you don't have competition at all," President Obama said in February at his health summit. "We want competition."
Yet the consolidation wave is churning the insurance markets and reshaping clinical medicine with almost no public scrutiny. A rational system would give consumers an incentive to reward those businesses that innovate and deliver higher quality at lower cost, whether they are providers or insurers. ObamaCare is already moving the U.S. even further from the rational world, and this forced retreat will continue the longer it is left in place.
well, now we can see
ObamaCare's once and future harms have been well chronicled, but the major effects so far are less obvious and arguably more important: A wave of consolidation is washing over the health markets, and the result is going to be higher costs.
The turn toward consolidation among insurance companies is not new, and neither is it among doctors, hospitals and other providers. Yet the health bill has accelerated these trends, as all sides race to anticipate and manage political risk and regulatory uncertainty. This dynamic is leading to much larger hospital systems and physician groups, and fewer insurers dominated by a handful of national conglomerates. ObamaCare was sold using the language of choice and competition, but it is actually reducing both.
he first surge will come among the 1,200 insurers doing business in the U.S., given that a major goal of ObamaCare is to convert these companies into de facto public utilities. Those regulations are now being written—and once they're up and running some medium-sized carriers will collapse under the new mandates and higher overhead. State insurance commissioners warned the Administration this month that "improper or overly strident application . . . could threaten the solvency of insurers or significantly reduce competition in some insurance markets." They also implied that bankruptcies are likely...
This trend got a preview two weeks ago when Mercy Health Partners announced that it was seeking buyers for three Catholic hospitals in northeast Pennsylvania. CEO Kevin Cook told local media that ObamaCare was "absolutely" a factor in the decision to sell, only to backtrack once his comments were used in campaign ads against House Democrats Paul Kanjorski and Chris Carney, who voted for the bill.
Though it received little attention over a year of debate, ObamaCare actively promotes provider consolidation. Writing this summer in the Annals of Internal Medicine, Nancy-Ann DeParle and other White House health advisers argued that "The economic forces put in motion by the Act are likely to lead to vertical organization of providers and accelerate physician employment by hospitals and aggregation into larger physician groups."..
Hospitals are now on a buying spree of private physician practices in the rush to build something that will qualify as an ACO. Some 65% of doctors who changed jobs in 2009 moved into a hospital-owned practice, while 49% of doctors out of residency were hired by hospitals, according to the Medical Group Management Association. In its 2010 census, the American College of Cardiology reports that nearly 40% of private cardiology groups are currently integrating with hospitals or merging with other practices.
Doctors are selling because complying with the ever-growing list of mandates has become more cumbersome; and while staff physicians on salary do gain predictability, they also lose the autonomy of independent practice. The other problem is price controls in Medicare, which are about 20% below private payments for doctors and 30% lower for hospitals. Hospitals are also scooping up practices to lock in referral sources and make up for ObamaCare's Medicare cuts. As it is, two-thirds of hospitals lose money today on Medicare inpatient services, according to Medicare...
"In a lot of states, the problem is just you don't have competition at all," President Obama said in February at his health summit. "We want competition."
Yet the consolidation wave is churning the insurance markets and reshaping clinical medicine with almost no public scrutiny. A rational system would give consumers an incentive to reward those businesses that innovate and deliver higher quality at lower cost, whether they are providers or insurers. ObamaCare is already moving the U.S. even further from the rational world, and this forced retreat will continue the longer it is left in place.
