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In the case of health care, consolidation has probably made things worse by muting competition. There are now five big insurance companies, three big wholesaler

In the case of health care, consolidation has probably made things worse by muting competition. There are now five big insurance companies, three big wholesalers, three large pharmacy chains and three big benefit managers. In the case of health care, consolidation has probably made things worse by muting competition. There are now five big insurance companies, three big wholesalers, three large pharmacy chains and three big benefit managers.

lotsofpulp 6y ago
That is the situation I see with pretty much all businesses. 2 to 3, maybe 5 large organizations who can outcompete everyone due to economies of scale, especially due to advancements in technology.
- tryptophan 6y ago
  Healthcare administration isn't really a high tech business though. I think the culprit here is obamacare; after all it was written by the insurance companies. Who's surprised that it benefits them the most? Insurance stocks absolutely took off after it was passed.
  - lotsofpulp 6y ago
    Databases, instant communications, time And chart tracking all allow healthcare facilities (and every other private business) to scale up much easier and with far less labor than ever before. I can right now download all my health info into Apple health app from my healthcare provider’s website and use that anywhere I want, whereas that might have required a few calls and someone’s time.
boublepop 6y ago
As I see it consolidation isn’t the root cause. The central problem is that pharmacy benefits manager have been allowed to invert the normal market. Normally for someone arranging the “resale” of a product from a producer to costumers would make more money if the price got negotiated down. But since PBMs have forced rebates of 70%+ that means that they are making most of the money on a drug sale. So even thought they are representing the buyers at the negotiation table, they want the prices as high as they can be. Producers are sitting down at the table and outbitting each other not on how low the price could be, but how high they are willing to make it, it’s absurd. And you’d think the insurance companies or pharmacies would object, but often they are owned by the same group so they all just share the proceeds from ripping of the people.
- nazgulsenpai 6y ago
  Pharmacies, PBMs and insurance companies being owned by the same group is all an effect of consolidation. Source: worked for an independent specialty pharmacy that was purchased by a PBM that in turn merged with a major national insurer
  - boublepop 6y ago
    I mean sure it’s an effect in the sense that when it happens we call it consolidation. My point is that none of the groups owning the insurance companies are buying up the pharmaceutical companies. And why should they? They are pulling home 2/3 of the profits of the price hiking campaigns they are driving and go about blaming it all on the companies who’s day-to-day is focused all about how we can make these drug cheaper, yet that never reaches the consumer.

lotsofpulp 6y ago

That is the situation I see with pretty much all businesses. 2 to 3, maybe 5 large organizations who can outcompete everyone due to economies of scale, especially due to advancements in technology.

tryptophan 6y ago
Healthcare administration isn't really a high tech business though. I think the culprit here is obamacare; after all it was written by the insurance companies. Who's surprised that it benefits them the most? Insurance stocks absolutely took off after it was passed.
- lotsofpulp 6y ago
  Databases, instant communications, time And chart tracking all allow healthcare facilities (and every other private business) to scale up much easier and with far less labor than ever before. I can right now download all my health info into Apple health app from my healthcare provider’s website and use that anywhere I want, whereas that might have required a few calls and someone’s time.

boublepop 6y ago

As I see it consolidation isn’t the root cause. The central problem is that pharmacy benefits manager have been allowed to invert the normal market. Normally for someone arranging the “resale” of a product from a producer to costumers would make more money if the price got negotiated down. But since PBMs have forced rebates of 70%+ that means that they are making most of the money on a drug sale. So even thought they are representing the buyers at the negotiation table, they want the prices as high as they can be. Producers are sitting down at the table and outbitting each other not on how low the price could be, but how high they are willing to make it, it’s absurd. And you’d think the insurance companies or pharmacies would object, but often they are owned by the same group so they all just share the proceeds from ripping of the people.

nazgulsenpai 6y ago
Pharmacies, PBMs and insurance companies being owned by the same group is all an effect of consolidation. Source: worked for an independent specialty pharmacy that was purchased by a PBM that in turn merged with a major national insurer
- boublepop 6y ago
  I mean sure it’s an effect in the sense that when it happens we call it consolidation. My point is that none of the groups owning the insurance companies are buying up the pharmaceutical companies. And why should they? They are pulling home 2/3 of the profits of the price hiking campaigns they are driving and go about blaming it all on the companies who’s day-to-day is focused all about how we can make these drug cheaper, yet that never reaches the consumer.