Large hospitals systems have been forming regional monopolies for the last few decades. First they would buy other hospitals to increase negotiating leverage with insurers, then they started buying outpatient clinics to control patient flow. They can also increase the amount they charge at outpatient clinics once the larger hospital system buys them.

Hospital spend represents 30% of US healthcare spend, and physician spend represents 20%. Physician employment by hospitals is at an all-time high. Busting local healthcare monopolies would do a ton to lower healthcare costs

Unfortunately that is difficult. The hospital lobby spends about as much as the pharma lobby. But the hospital industry has much more "soft" political power. Hospitals are one of the biggest employers in almost every county. So for a politician to fight hospitals would mean fighting their largest employers.

Hopefully more people become aware of this behavior by hospitals. You dont read much about it in the media. I'd imagine this has is because no one is incentivized to call out this behavior by hospitals

Healthcare stocks comprise a not insignificant part of many Americans' 401k portfolios, the downstream economic effects of dismantling healthcare would extend way beyond the hospital/pharma industry.

That 401k isn't going to be very useful if you can't afford healthcare.

And even less useful if you're bankrupted by it.

Less than half of the population have stocks of any kind, so this is not an issue. For the ones that do, re-balance.

Hospitals & hospice are the ones who're gonna suck up all that sweet 401k money eventually anyway, in most cases. Inheritance is dead for the middle class—the elderly are, in the best case, sustained by their retirement accounts until they get sick in the last 5-10 years of their life and the healthcare industry siphons off all their money.

So yeah, go ahead and hit my retirement account for 20% in exchange for fixing healthcare—properly, like a real friggin' modern country I mean. Seems like a bargain.

Are you sure that we should be going after hospitals rather than the insurance companies? I've been told by a doctor friend of mine that the price of treatment in hospitals are often affected by how much insurers are willing to pay. They bill an insurance company X, the insurance company only a fraction of that and the hospitals just have to deal with it. So suppose they get more leverage and they increase how much they charge--is that an increase in how much insurance companies pay or how much patients pay? Or both? And how does this compare to the actual costs of treatments before and after such an acquisition?

Except, as I understand it, it's more like this:

Hospital bills Insurance Company $XXX,XXX.XX and Insurance Company says, "No, we'll only pay $XX,XXX.XX" so Hospital pays it. What's not mentioned is that it only cost Hospital $XXX.XX for the procedure so while they're complaining that the insurance companies only pay them a fraction of what they billed for the procedure, they're still making a massive margin.

That's not to suggest they don't have real, valid expenses. That's not even to suggest their expenses aren't high but, how would we know? They won't even tell us, the patients, how much any given procedure costs. It all seems like a wink-wink-nudge-nudge between them and the insurance companies to me while the rest of us get screwed.

That would imply hospitals are a very profitable business. However, only 18% of hospitals are for profit in the first place, and nearly a hundred hospitals (mostly rural) have closed in the last year. The operating margin of NFP hospitals in 2017 was 1.7%. The average operating margin of the S&P 500 was 10.7%. And id bet insurance companies are looking better than hospitals as well.

Plus hospitals cant just charge for procedures at cost. There are revenue sinks hospitals have no choice to deal with. If someone without insurance and no source of income gets hurt and has to go the ICU, it can cost upwards of 10k a day. Who pays the bill? The hospital. And they cant discharge such a patient until they're healthy.

The dynamics between hospitals and payers depend on market and negotiating leverage. A small hospital in a competitive market will struggle, while a large hospital system in an unsaturated market will do very well.

Are hospital failures due to payers, or due to competition from other hospitals? If a payer is getting squeezed by a big hospital system, it may in turn squeeze a smaller hospital or provider.

One of the biggest for profit hospital chains, HCA, generates 20-25% EBITDA margins. Many non profits are very powerful and make lots of money, they just spend more on salaries so their net income is lower. But yes many hospitals do struggle.

Insurance companies must spend 80% of their premium revenue on healthcare services. So their profits are in effect capped.

> "You guys need to be sending more people to our hospitals."

This is true even in a socialized system like the military or VA, where the folks in leadership positions are seen in their own system. And that saves money, in no small part by reducing the amount of testing, improving continuity of documentation, etc. That savings doesn't just pad some executive's bank account. It makes it easier to give the nurses a raise, or keep a few more on staff through a recession. Makes it easier to buy that new 3 Tesla MRI for better resolution imaging, etc.

Not holding my breath on that one. The current health care system is institutionalized and is going resist reform every step of the way.

I get the sense that "reckoning" in this case will be a little more "exciting" than reform.