U.S. Healthcare: Anti-Competitive Monopolies?

U.S. Healthcare: Anti-Competitive Monopolies?

There has been some criticism of US Health and Human Services Secretary Kathleen Sebelius’ remarks regarding the notion of a private insurance monopoly in the U.S.:

“We want to make this work. We understand the status quo is unacceptable. We understand we have to do something this year. And we also understand that an insurance monopoly with only private companies doesn’t hold down costs.”

See her on NewsHour:

Before I share links of examples of monopolistic behaviors amongst healthcare companies and the lawsuits that are a result of these monopolies, I want to add that the market has had decades to increase competition and differentiate on quality of care, services offered, cost and any number of features. That the private industry cannot and will not cover everybody is a market failure to provide a basic human right: access to healthcare for every citizen.

I found this 109 page PDF on the Healthcare for America Now website. Of note:

“If they chose to, private insurers could use their market power to drive hard bargains and lower costs, but instead they have passed along these costs through higher premiums to enrollees and employers.”



This page shows U.S. Insurance Market Concentration by State using 2007 data. (Here’s a more legible PDF)

The most populous states have better insurance “options”, but one still has to qualify to be insured and the premiums in New York and California are about what most people in the U.S. pay on their mortgage.

Links about lawsuits & settlements
From 2006 NYTimes: Doctors’ Group Sues Two Insurers, Charging Unfair Coercion

From 2006 medicalnewstoday.com: Lawsuit Claims Several Health Care Systems Conspired To Fix Pay For Nurses

From 2007 NYTimes: Hospital Sues Insurer, Charging Conspiracy

From early 2009 Reuters: UnitedHealth settles payment suits for $350 million

From 2006 FierceHealthcare.com: HealthOne fights UnitedHealth suit (This is awesome! UnitedHealth claimed that HCA was using anti-competitive practices! HCA fought back.)

From today’s Wall Street Journal: Big Health Firms Underpay Claims

In all of these links, the behavior of the insurance companies are anti-competitive and indicative of what happens when monopolies exist.

The longer I research and write about healthcare reform, the harder I’m leaning toward scrapping the health insurance industry and advocating a single payer system. The stories and behaviors of private companies are horrifying. I can be a realist sometimes. We are not in a climate where single payer is going to happen. However, I believe we are in a climate where a public option is a must. No real change is going to happen unless there is an option for everybody to be covered. Private industry will not do it. It’s time for the government to step in.