For over a year now, when Americans have thought “problems in health care,” they’ve mostly thought about the pandemic.
But with the pandemic coming to an end (except for those of us in red states full of Trumpers who think Bill Gates is using Pfizer to insert tracking devices into our veins), it’s a good time to start talking about another problem thrown up by COVID-19: Health care utilization has been down for about a year now, but a bunch of rapacious monopolists/oligopolists have been ripping people off the whole time through a bunch of anti-consumer, hold-prices-sky-high crap that the virus’ direct toll has kept us all from paying due attention to.
Case in point: Providers getting gobbled up by hospital systems, and driving costs up especially through the use of aggressive testing.
Axios, in their Vitals newsletter on Tuesday, wrote about two studies covering this trend:
One study found that the odds of a patient receiving an inappropriate MRI referral increased by 20% after a doctor became employed by a hospital.
- Most patients then received the procedure at the hospital that employed the referring doctor.
The second study found the monthly number of diagnostic imaging tests and lab tests performed in a hospital setting among Medicare beneficiaries increased after physician practices were acquired by health systems.
- The number of imaging tests and lab tests in non-hospital settings decreased, and Medicare reimbursement rates for each kind of test increased.
So, to recap: During the pandemic, patients have been using the health care system less. But where hospitals have been acquiring doctor’s practices— basic provider consolidation— prices and what Medicare, especially, has been getting billed have been going up, up, up.
The “free market,” “capitalist” theory is that health insurers help restrain this kind of thing. Well, first, that’s not applicable where Medicare is footing the bill (then it’s up to Medicare, HHS and elected officials to scrutinize the situation). But second, insurers are in on this act, too.
Not only did insurers not drop their premiums when they knew health care system utilization would be down for months and months, if not years, thanks to COVID-19. They’ve been raking in a ton of cash as a result. Check this out, from Becker’s Hospital Review:
Seven for-profit health insurers saw their revenues and profits increase during the first quarter of the 2021 fiscal year.
1. Cigna recorded revenue of $41 billion in the three months ended March 31, up from $38.5 billion in the same period a year prior. The insurer ended the quarter with a $1.2 billion profit, nearly unchanged from the previous year.
2. CVS Health said its healthcare benefits segment Aetna saw total revenue increase 6.7 percent, and adjusted operating income increase 19.5 percent. The company said it gained 214,000 new members since Dec. 31.
3. Humana's revenues grew 9.2 percent year over year to $20.7 billion in the three months ended March 31. The insurer's first-quarter profit, $828 million, is 75.1 percent higher than it was in the same period last year.
I’ve only excerpted the first three entries. Go read the whole thing.
Here’s another example that is on no one’s radar, but concerns a monopolist/oligopolist player in the vision correction space that comes right out of the great state of Texas.
The company is Alcon, an American-Swiss company (incidentally, it wouldn’t surprise me if they skimp on their US tax bill using their Swiss corporate status). It is one of the world’s largest manufacturers of contact lenses, and it looks like it is so determined to hold its prices up artificially high that it’s actually going around suing discount lens-sellers like Lens.com.
You can read about that lawsuit here, but there are two important things to note. First, according to the CDC, about 45 million Americans wear contact lenses. That’s a lot of people! Second, I hear that Alcon has even tried to quasi-appropriate the American flag as its “intellectual property” to help limit gray market sales that discount sellers apparently engage in to try to give consumers a break, and make their money off of sales volume instead of high individual pricing. (Will Republicans who freak out about flag-burning weigh in on that? Place your bets!)
Then, of course, there is the ongoing situation concerning drug pricing. Democrats in Congress, inexplicably, seem to be stalling out on moving legislation to rein in pharmaceutical prices (which, incidentally, might leave a lot of non-ideological populist voters with the impression Trump did more on this subject than Biden).
This comes even as outrage overflows about how much vaccine-makers have banked off of the pandemic (in Pfizer’s case, $3.5 billion in revenue in the first three months of this year). And upon news that business groups might actually support fairly progressive prescription drug price legislation because, hey, company health plans are fed up overpaying Big Pharma, too.
So far this year, Democrats have banked on the GOP staying hardcore Trump and their competent management of the pandemic as the routes to keeping voters happy and staying in office. That Washington Post story about the NRCC polling that shows Trump’s approval way below Biden’s in swing districts suggests they have a point.
But ultimately, people in government have to deliver, or else voters get angry. Democrats have more latitude than a lot of parties might six months after winning a presidential election, but progressives expect them to deliver on health care writ large and not just on the things they have been (rightly) focused on.