Health Care's Crushing Lack Of Competition

Martin Gaynor, Farzad Mostashari and Paul Ginsburg | Forbes | June 28, 2017

No matter how it resolves, the fiercely partisan debate over repealing and replacing the Affordable Care Act will not solve America’s true health care crisis. Indeed, a key reason why expanding coverage is so hard is that health care services cost so much, making insurance premiums unaffordable to many.

Martin GaynorDriven by lack of competition, ever higher prices are being paid to hospitals, doctors and insurers without leading to better outcomes. It’s time to implement a competition policy for health care before Americans crumple under a system that is devouring family and government budgets. Middle class families’ spending on health care has increased 25% since 2007, crowding out spending on clothes, food and housing. We are paying the price for steady consolidation in the hospital and insurance arenas.

There were 1,412 hospital mergers from 1998 to 2015. Nearly one half of the country’s hospital markets are now considered highly concentrated. One or two large hospital systems dominate many areas, like Boston, Cleveland, Pittsburgh and San Francisco. Hospital admissions in these regions cost $2,000 more on average than admissions elsewhere...