Episode Details

In this healthcare podcast, I'm speaking with Eric Bricker, MD, about how so many entities in healthcare are getting up in other people's business and swimming in other people's traditional lanes. Consider last week's show with Katy Talento, for example. She mentions employers who are not only doing their own direct contracting (ie, cutting out the traditional carriers and negotiating directly with provider organizations) but also employee benefit consultants who are working on setting up their own hospital—an employer-owned hospital. That was episode 350, and while this hospital idea is a little future oriented, right now today, across the country, we have employers and also unions who are owning their own primary care clinics, which I discussed at some length with Mark Blum from America's Agenda (EP248).

In this episode with Dr. Bricker, we start from the beginning. We kick off the conversation talking about the payer, PBM, and hospital system horizontal consolidation that has transpired over the past decades (that's plural). Horizontal consolidation is pretty much the easiest way to decimate all competition in your own swim lane so that you can charge more and not worry so much about patient/customer/member experience because the patients/customers/members have no better alternative. They effectively have nowhere, or few other places at best, to go if they leave you.

So, what's the impact of horizontal consolidation? We get into this in the podcast, but subsequent to this recording, there was a study that came out in JAMA: "The Dysfunctional Health Benefits Market and Implications for US Employers and Employees." This was by David Scheinker, PhD; Arnold Milstein, MD; and Kevin Schulman, MD. This study showed that commercial insurance costs have gone up 4x the rate of other benchmark goods and services. Bottom line, "It is assumed that insurers compete intensely to improve the value received by employers and employees by negotiating to keep prices down and advocating for employers and employees." Ha ha … NOT.

With peak horizontal consolidation, there is little meaningful competition—so ixnay on that premise. By the way, if anyone knows any of those authors that I just cited in that study, hit me up. I'd love to get one of them on the show.

But let's spend a moment, shall we, on the human impact of all this extreme consolidation. The impact is your sister, your neighbor, your son, your friend. So many feel so much pressure financially in our country today because of healthcare costs. Even families earning significantly more than median household income are forgoing care because of costs. Again, this was in a recent paper. (The authors are Alyce S. Adams, Raymond Kluender, Neale Mahoney, Jinglin Wang, Francis Wong, and Wesley Yin.)

But the direct observable financial toxicity resulting from high healthcare patient costs is really only the tip of the iceberg here. As Dave Chase from Health Rosetta has said a million times already, high healthcare costs have a multitude of effects on employers, big and small. One big