POLITICS

Obamacare helps big hospitals, kills small practices, drives up costs

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Ward
Politics,Beltway Confidential,Timothy P. Carney,Politics Digest

When government gets bigger, big business typically benefits at the expense of smaller competitors, consumers, and taxpayers. Obamacare is demonstrating this rule.

Bloomberg reports today on how Medicare payment rules have led to hospital consolidation, with small practices selling out to big hospitals. The article notes about consoldation:

Simon Gisby, a principal in the life science and health care practice at Deloitte Corporate Finance LLC in New York, said the trend fits with changes starting to take place under the 2010 Affordable Care Act designed by the Obama administration to overhaul health care.

This consolidation means higher costs, the article explains. Some academic studies have confirmed that hospital consolidation means higher costs, and at least one has pinned some of the blame on Obama’s Affordable Care Act:

hospitals are able to extract higher private payments when they hold more market power…. Now provisions of the ACA are encouraging further consolidation of hospitals and physicians, and the final antitrust review regulations from the Department of Justice and the Federal Trade Commission have eliminated the proposed mandatory review of certain prospective ACOs.

News reports also point towards Obamacare causing provider consolidation — that is, small practices selling out to bigger hospitals.

This is standard. Dodd-Frank looks like it is making big banks bigger. Toy-safety regulation has accrued to the benefit of the big toymakers while killing Mom n Pop competitors. Wal-Mart’s support for the employer mandate in health insurance and a higher minimum wage weren’t philanthropy. There’s a reason Philip Morris supported FDA regulation of tobacco and smaller cigarette companies called it the “Marlboro Monopoly Act.”

Looks like Obamacare is going down the same path — and undermining its stated purpose of lower costs. Of course, this never was a cost-control bill in the first place.

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