At the heart of President Obama’s signature health care law is a simple idea: Bigger is better.
His law incentivizes massive mergers of systems and providers into big players in the marketplace, binding them together to share costs. These new health care behemoths will be managed from Washington, with regulators wielding control from on high.
There’s just one problem. When it comes to health care, “bigger is better” isn’t true. And consumers will pay a huge price for this mistake.
The president’s health care law contains rafts of new regulations, benchmarks, and taxes for providers to deal with. Since these limit profit margins and create new administrative costs, they make it very appealing for health care providers to merge into gigantic, sprawling systems of care. A recent report in The Washington Post noted, “The health care industry is increasingly turning to consolidation as a way to cope with smaller profit margins and higher compliance costs that many anticipate when the federal government’s health care reforms under [Obama’s law] take effect.” Across the health care industry, we’re seeing the merger trend continue to rise.
These large mergers don’t actually translate to better care or to savings for patients. The Wall Street Journal recently reported on a patient from Nevada whose echocardiogram bill came to $373 before a merger and then $1,605 after a merger. The same treatment, in the same office, by the same cardiologist, separated by just six months — but with a price point far higher because the provider had been purchased by a hospital system, allowing for a much higher price to be charged.
His law incentivizes massive mergers of systems and providers into big players in the marketplace, binding them together to share costs. These new health care behemoths will be managed from Washington, with regulators wielding control from on high.
There’s just one problem. When it comes to health care, “bigger is better” isn’t true. And consumers will pay a huge price for this mistake.
The president’s health care law contains rafts of new regulations, benchmarks, and taxes for providers to deal with. Since these limit profit margins and create new administrative costs, they make it very appealing for health care providers to merge into gigantic, sprawling systems of care. A recent report in The Washington Post noted, “The health care industry is increasingly turning to consolidation as a way to cope with smaller profit margins and higher compliance costs that many anticipate when the federal government’s health care reforms under [Obama’s law] take effect.” Across the health care industry, we’re seeing the merger trend continue to rise.
These large mergers don’t actually translate to better care or to savings for patients. The Wall Street Journal recently reported on a patient from Nevada whose echocardiogram bill came to $373 before a merger and then $1,605 after a merger. The same treatment, in the same office, by the same cardiologist, separated by just six months — but with a price point far higher because the provider had been purchased by a hospital system, allowing for a much higher price to be charged.
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