I can’t seem to look away from the ongoing wreck that is Conservatism in America today. I want to, I just can’t muster the courage to ignore it. There are several favorite tenets to GOP orthodoxy we keep hearing in the media and I find it curious but not surprising that no-one ever publicly pushes back on these fallacies.
1) Trickle down economics: The idea that if we can rain the maximal amount of transfer of wealth to the already wealthy, that there will be scraps enough falling from the table so that the poor can tat them into bootstraps big enough to graduate to “the middle class”. Google Kansas. I’ll wait.
2) An unregulated Free Market is the BEST. THING. EVER. and the solution to poverty. This is the biggest, juiciest wet dream of Libertarians and Conservatives alike. Never mind that it doesn’t exist anywhere in the world. I’ve been challenging folks to provide me an example of a completely sustainable free market operating anywhere at any time in history. So far, crickets.
This brings me to the big lie being spread like runny manure on a spring day that unfettered competition in the healthcare and insurance industry will LOWER PRICES and IMPROVE quality of care. COMPETITION! What a good idea on paper if you work for a Koch brothers think tank. The trends are all running in the opposite direction.
Paul B. Ginsburg testified before the California Senate Committee on Health on fostering competition in consolidated markets:
Health care markets are becoming more consolidated, causing price increases for purchasers of health services, and this trend will continue for the foreseeable future despite anti-trust enforcement;
Consolidation in health care has been increasing for some time and is now quite extensive in many markets. Some of this comes from mergers and acquisitions, but an important part also comes from larger organizations gaining market share from smaller competitors. The degree of consolidation varies by market. In California, most observers believe that metropolitan areas in the northern part of the state have provider markets that are far more consolidated than those in the southern part of the state. Insurer markets tend to be statewide and are less consolidated than those in many other states. The research literature on hospital mergers is now substantial and shows that mergers lead to higher prices.
The trend is accelerating for reasons that are apparent. For providers, it is becoming an increasingly challenging environment to be a small hospital or medical practice. There is more pressure on payment rates. New contracting models, such as Accountable Care Organizations (ACOs), tend to require more scale. The system is going through a challenging transition to electronic medical records, which is expensive and requires specialized expertise to avoid pitfalls. Lifestyle choices by younger physicians lead them to pursue employment in large organizations rather than solo ownerships or partnerships in small practices.
The environment is also challenging for small insurers. Multi-state employers prefer to contract with insurers that can serve all of their employees throughout the country. Scale economies are important in building the analytic capabilities that hold so much promise for effectively managing care. Insurer scale is important to make it worthwhile for providers to contract with them under alternative payment models. The implication of these trends is an expectation of increasing consolidation.
This isn’t just happening in medicine, but across all businesses in the US. Media, Big Oil, Pharma, Wall St. etc. Selling insurance across state lines isn’t going to increase competition. It will increase the number of scammers who sell policies that cover nothing essential, and eventually consolidation will swallow them up like Wells Fargo et al did the small banks in the mortgage industry.
Auto insurance is sold in all 50 States, that’s competition, right? “Free market” right? Insurance premiums should be next to nothing. Well, if memory serves me, I paid around $300 a year for full coverage in my 20’s now I’m paying almost $600 a year for liability only. I’d love to hear from anyone whose payments went DOWN. Didn’t happen. Ain’t gonna happen. That’s because in reality it’s a captive, closed market. The rates are determined by what maintains profit, and the exact same model is used in health care. Insurers and hospitals don’t want competition and they spend millions in lobbying to prevent it. They can charge usurious rates because medical care can’t be exported like manufacturing. The US pays more for medical care than any other country on the planet. If conservatives truly wanted competition they’d vote for laws allowing patients to buy medicine available outside the country. They just shot a bill down as recently as January this year.
The Senate voted down the amendment 52-46, with two senators not voting. Unusually, the vote was not purely along party lines: 13 Republicans joined Sanders and a majority of Democrats in supporting the amendment, while 13 Democrats and a majority of Republicans opposed it.
One of those Democrats was New Jersey’s Cory Booker, who is considered a rising star in the party and a possible 2020 presidential contender.
In a statement to the media after the vote, Booker’s office said he supports the importation of prescription drugs but that “any plan to allow the importation of prescription medications should also include consumer protections that ensure foreign drugs meet American safety standards. I opposed an amendment put forward last night that didn’t meet this test.”
This argument is the same one offered by the pharmaceutical industry. The Pharmaceutical Research and Manufacturers of America (PhRMA), which lobbies against importation, maintains that it opposes importation because “foreign governments will not ensure that prescription drugs entering the U.S. from abroad are safe and effective.”
The safety excuse has long been a refuge for policymakers who don’t want to assist Americans struggling with prescription drug costs. Bills to legalize importation passed in 2000 and 2007, but expired after the Clinton and Bush administrations refused to certify that it would be safe. The Obama administration also cited safety concerns when opposing an importation measure in the Affordable Care Act.
The Republicans and Corporatist Democrats love regulations that preserve profit and the status quo. That’s why we must wrench their grubby paws from the levers of power without further delay. It may already be too late, I don’t know. I do know it won’t happen inside the current power structure.