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On the Third Hand: Hospitals

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I have no insider knowledge whatsoever and no idea what the folks at America’s Health Insurance Plans (AHIP) do behind closed doors. Maybe they have offices full of voodoo dolls.

In public, they seem to be extremely positive and constructive and good at pointing out stuff that anyone of any political stripe ought to be thinking about.

Example: AHIP has now filed a brief telling the 6th U.S. Circuit Court of Appeals that AHIP members believe hospital consolidation in markets such as Toledo, Ohio, violate federal antitrust laws and could increase the cost of hospital care.

Economists have complicated, conflicting ideas about how health care economics really works.

Some have suggested that, in some cases, increased competition could actually increase health care spending, by, for example, encouraging hospitals to buy expensive, flashy equipment, and for patients to flock to the hospitals with the fanciest equipment.

AHIP contends that the hospital market is, really, a lot like other markets.

The majority of the empirical studies concerning the impact of the wave of
hospital consolidations found that many of the consolidations led to higher prices,” AHIP says in its brief.

Providers, of course, contend that damaging consolidation has occurred in the health plan market.

In a new study, the American Medical Association (AMA) one health insurer had a preferred provider organization (PPO) plan share of at least 50 percent in 68 percent of the metropolitan areas that the  AMA analyzed.

One fast way to simplify the shopping process is to eliminate choice. If the United States ends up, say, with one giant health insurer and one giant hospital company, then, really, that would sharply reduce the need for health insurance brokers all by itself, by reducing consumers’ or employers’ ability to make any practical use of information about the health care market.

But, on the other hand: It seems as if just about any important monopoly or monopsony breeds rebellion. The Star Wars Empire brought the Jedi knights back out of the sand. The Soviet food distribution system led to the birth of a black-market agriculture sector. The alleged single-payer health care systems in Europe tend to spawn legal or illegal private health care provider markets.

One thing that’s interesting is how quick health policy players seem to be to let the Han Solos of the U.S. health care system — the agents and brokers — get pushed aside.

On the one hand: I have no idea what the answer to U.S. health care system consolidation is.

On the other hand: My guess is that a politically diverse of practical, non-doctrinaire health insurance producers would be the best equipped people to come up with possible answers, or, at least, identify the smart, practical, non-doctrinaire policy experts who could come up with the answers.

On the third hand: The agents and brokers have actually been out there saying sensible things for a long time without getting all that much attention. Maybe the goal should not be so much to get them to speak up but to persuade policymakers to pay more attention to them.

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