How Obamacare Raised Health Care Costs
Last week, I testified at a joint hearing of two House Oversight subcommittees discussing health care policy. A full copy of my testimony is available here, but I wanted to highlight a revealing admission made by the minority witness. In addition to advocating for an extension of the enhanced Obamacare subsidies, Sophia Tripoli of Families USA included the following section in her written testimony analyzing the forces driving increases in health care spending:
Hospitals, health systems and other providers have rapidly consolidated, via horizontal and vertical integration, into large health care corporations, amassing outsized market power in order to increase prices for hospital care year after year. In fact, over 1,500 hospital mergers have occurred between 1998 and 2017, with an estimated 40% of those mergers taking place from 2010 to 2015. Moreover, between 2013 and 2021, the percentage of physician practices that were hospital-owned rose from 15% to 53%, and the percentage of physicians employed by a hospital rose from 27% to 52%. [Emphasis added.]
A sizable number of hospital mergers took place between 2010 and 2015? Gee, I wonder if Congress passed any laws in 2010 that might have created this wave of hospital consolidation…
Ms. Tripoli’s comments echo those of Sen. Elizabeth Warren (D-MA), who just over two years ago co-authored a letter noting that medical loss ratio (MLR) regulations have encouraged insurers to buy up pharmaceutical benefit managers and other entities, so they can shift profits from their insurance business (where the MLR caps their profits) to their pharmacy, PBM, or other businesses where profits are uncapped.
Like Ms. Tripoli, Sen. Warren didn’t mention the fact that Obamacare created the MLR requirement that has encouraged this consolidation within the health care sector. Perhaps the Left would have slightly more credibility arguing for an extension of enhanced Obamacare subsidies if they would come out and admit those enhanced subsidies are necessary only because the law underlying them has failed…