We have treated the utility industry since the Sherman Antitrust Act was signed into law in 1890. Until the 1990’s most health insurance companies were mutual companies … the were NOT FOR PROFIT businesses and their policy holders basically owned the company. but starting in the 1990’s the healthcare insurance industries began “demutalizing” … they converted the companies into FOR PROFIT, PUBLICLY HELD COMPANIES and their focus change to their bottom line profits and price of their stock. The people who were stockholders became more important to the insurance company and large group health insurance plans than the healthcare that they provided.
In the last decade or so… mergers having been happening and we are being left single companies that provide various services,, that can both self serving and “feed/refer” business from one component to another.
CVS Health is a good example, first in the pharmacy business in 1964 with pharmacy depts in the then Consumer Value Stores. Today, they have some 10,000 community pharmacies, Minute clinics in their stores, owns the largest long term care pharmacy (Omnicare), one of the largest Prescription Benefit Managers (Caremark), one of the largest Part D insurers (Silver Scripts) and currently trying to close a 60+ billion dollar deal acquiring Aetna insurance with some 43 million beneficiaries. Their Minute Clinics which were originally suppose to deal with just acute health issues is starting to move into treating chronic health issues.
These health monopolies may or may not be able to “force” a pt to use all their services, but they can put into place financial incentives or disincentives to stay within their system and force pts to contribute to their bottom lines.
All of these insurance companies are exempt from Sherman Antitrust by the McCarran Ferguson Act.. So what is ILLEGAL for other business to do, these insurance companies can do without any concern of violating any law or suffering any consequence from the DOJ.
In the last year, Arkansas, Ohio, WV has caught PBM’s charging excessive costs for prescriptions (multiple millions in each state) they manage the bill paying for state employees and/or Medicaid pts. These are national PBM’s so it may not be long before other states start finding out that they are being “taken to the cleaner” by these PBM’s and taking some corrective action.
Personal experience, Barb had a chronic medication that our Part D/PBM wanted a prior authorization and a $600.00+ copay for her 90 day medication and I was able to find a big box store where I could purchase the same medication/strength/quantity for $44.00 – by PAYING CASH. Saving abt $2,400.00/yr on JUST ONE PRESCRIPTION. Maybe this is why they can charge pts about $30/month for premium…
Filed under: General Problems
Not only do we CVS taking over here in Pittsburgh but UPMC owns most of the hospitals & Dr offices! My primary care physician moved into one of their new muti-dr offices/ walk in clinic 3yrs ago and unfortunately her care has gone down hill….now I’m just another number! I’ve been looking for a new Dr but it’s really hard here most in my area are associated with UPMC! They have been in the news lately for being a charity org so they’re tax exempt, the CEOs making millions, the workers get paid like crap & many more issues!!
Interesting. What can we do to see the law changed and break up these monopolies? Beyond a shadow of a doubt it has contributed to higher prices and lower quality of medical care!! I personally don’t have medical insurance (well over $1000 a month to add me to hubby’s policy) but it still affects my costs and quality of care! Makes one wonder if they are setting up to provide the “free Medicare for all” which will be a prohibitively expensive nightmare for everyone!!
You will never break them up.. the insurance industry has one of the largest lobbying budgets… with declaring them a monopoly – treat them like a utility – after all many politicians are calling for “medicare for all” .. then – as a utility – then control their pricing and their profits.
STEVE is 100% correct. I worked for Advance Paradigm in Richardson TX begin in 2001,,David and Jon Halbert were pharmacists, who operated a Home health Care company and began Advance Paradigm, our 1st purchase was the PBM system from Rite Aid (they had to sell it because it was found to have I think the Gambino Crime Family business for the families Businesses they owned and the CEO of Rite aid knew about it).
The Government MADE Rite-aid sell the PBM section Advance Paradigm bought it at a rock bottom bargan basement price. Becoming Advance/PCS.
All the computer systems had to be migrated securely to us. Couple years later, Caremark took a look at us, they handled mainly employer based RX coverage, they had a slightly higher EBIFTA so the name changed per law to Caremark (it was a merger) David and Jon, made about 100mil each on that and left. Then, CVS, took a look at us, and offered 21billion dollars which several investor groups like CALPERS, NYPD, NYFD, TRS, which owned stock in Caremark (the employees retirement fund which each had a fudiciary duty to make certain the sale was not sold at a low price) sued in federal court blocking the sale stating Caremark was worth MORE than 21billion a federal judge agreed, so CVS upped the offer to 28 billion. The merger went through becoming CVS/Caremark. Then with all the cash flow coming through they began all that is mentioned in the article. I was there, I went through all the sales or mergers. STEVE IS CORRECT. Now,Aetna, they want to buy and mostly have for 60 billion. After a second look,, the government has made them divest all stand alone PDM Part-d plans as a continued requirement, mine has change to a different names company. A PBM is not touchable by the Government. Period.