Monopoly is a huge factor in driving up prices and driving down quality in America’s health care sector. After waves of hospital mergers, most Americans now live in communities where only one or two hospitals still compete for their health care dollars, and where competition among health care insurers has also largely disappeared. Meanwhile, competition in the pharmaceutical industry is stymied by patent monopolies and highly concentrated corporate ownership.
When Americans buy health insurance they typically find they have fewer and fewer choices. In some states, such as Alabama, a single insurance company has a near total monopoly. In half of all metro areas, just two health insurers divide two-thirds of the market.
This high degree of concentration has been building for years.
The American consumer enjoys more choices than ever before, or so it seems. A trip to the grocery store reveals aisle after aisle of varied products marketed under countless brand names to countless specifications. Big e-commerce sites like Amazon feature a still greater plethora of choices.
Yet all is not what appears to be. Take eyeglasses, for example.
Compared to the discourse in the other party’s nomination process, the debate between Hillary Clinton and Bernie Sanders over health-care reform may have seemed thoughtful and on point. Clinton argued that Sanders’s “Medicare for all” plan was too expensive to ever become law and was also a threat to the progress achieved by the Affordable Care Act (ACA). Sanders criticized Clinton for compromising the progressive goal of a single-payer system that would make health care a right.
A frenzy of hospital mergers could leave the typical American family spending 50 percent of its income on health care within ten years—and blaming the Democrats. The solution requires banning price discrimination by monopolistic hospitals.