For a while, I have been trying to highlight that the real problem with health care is that consumers who receive the service do not have any incentive to shop for the best price or to make trade offs on marginal procedures based on price. The only people who have any incentive to shop are 1) people without insurance and 2) people with high deductibles (like me). Politicians are trying to eliminate the former group, even if they don't want insurance, and programs like Romney's in Massachusetts actually ban high deductible insurance.
The consequences of lax enforcement for consumers are clear. Take
health care, for example. There have been over 400 health care mergers
in the last 10 years. The American Medical Association reports that 95%
of insurance markets in the United States are now highly concentrated
and the number of insurers has fallen by just under 20% since 2000.
These changes were supposed to make the industry more efficient, but
instead premiums have skyrocketed, increasing over 87 percent over the
past six years. As president, I will direct my administration to
reinvigorate antitrust enforcement. It will step up review of merger
activity and take effective action to stop or restructure those mergers
that are likely to harm consumer welfare, while quickly clearing those
that do not.
How can these mergers harm consumers when consumers don't shop for the service and don't care about price in the first place? Candidates like Obama and Clinton are threatening to create single payer systems that use monopsony power combined presumably with the coercive power of government to hammer suppliers. Is it any wonder that they are joining together to try to gain some sort of bargaining position for themselves? In the context of what Obama wants to do with health care buying, this can be thought of more as unionizing than merging.
By the way, does anyone else note the irony of Obama, who wants to create a single supplier for health care (the US Government) lamenting concentration in the health care field?