Yesterday, Health Care for America Now released a report showing that there is no real competition in the health insurance market, with 94% of markets in this country rated near-monopolies by the Department of Justice.
Of course, the health insurance industry, which has made its money off of the mergers that created these monopolies (and now enjoy monopoly power to raise premiums and deny care with impunity), didn't like those facts. So they challenged them. Fortunately, they don't challenge them well.
In response to our letter to the Department of Justice asking them to investigate these monopolies, AHIP sent their own, arguing our report was based on "erroneous data:" [pdf]
With that as background, we note with concern the American Hospital Association (AHA)’s recent call in a letter to you for the Justice Department [pdf] to take a more “aggressive role in understanding how health plan market power and consolidation harm hospitals and other providers.” This letter uses erroneous data to draw an erroneous conclusion that today is being used by advocates for creating a public program in health care reform to justify their position. This is unfortunate, given the implication that various public program designs will have on hospitals.
The AHA letter and accompanying report condemn health plan mergers as receiving “relatively little antitrust scrutiny,” with the Antitrust Division requesting only “relatively minor divestitures” in approving mergers and the FTC condemned as “aggressively apply[ing] the antitrust laws to arrangements between physicians and between physicians and hospitals,” yet ignoring “health plan abuses of market power.” Those charges are at odds with the facts and mischaracterize the thoughtful work of the Department of Justice over the last fifteen or more years in its scrutiny of health plan mergers. Not only have these mergers been thoroughly vetted by your agency, but the analysis and charges rely on incorrect market share and concentration analysis that ignores, misuses, or misconstrues basic antitrust concepts, such as relevant geographic market, product market, and competitive effects. In contrast, each Antitrust Division investigation—of any area, including health insurance—is carefully built upon the strong foundation of actual facts, specific market data, and careful fact-and market-specific analysis.
So, AHIP, what erroneous data? What part of the data we used was wrong? And why was it wrong?
Guess what: They never say. They just call the data "erroneous," as if just saying that would make it true. No competing data is offered to show that 94% of the communities in America are not, in fact, under the thumb of insurance industry near-monopolies.
A bit of an aside: You'll notice that AHIP's letter never mentions our report by name. Instead, it goes after an AHA letter which came to the very same conclusions using the very same data we used in our report. That's a strategy on their part, not to mention us at all. I got a note from an insurance industry insider confirming that tactic:
That is exactly how they operate. Attacking hospitals, drug makers and doctors is a central part of their strategy to try to turn attention away from them and toward the "real drivers of health care costs." And not mentioning HCAN is also consistent with their strategy, just as they carefully avoided mentioning Michael Moore and SICKO. They haven't changed a bit. It would be tempting to challenge their release. For one thing, providers have been forced to consolidate because of the ever-growing power of insurers. The providers' consolidation has been in self-defense. And the competition in most marketplaces is between two big giants, not among several modest-sized plans, which was common a decade or so ago.
And indeed, the rest of AHIP's letter attacks provider as the real drivers of health care costs, not monopolistic insurance companies.
One last note: It's hilarious that AHIP is relying on the Bush-era Department of Justice's decisions on monopolies for credibility. That's the entire argument that they're making, that the Bush Justice Department did such a good job investigating mergers and enforcing regulations that clearly, this lack of competition isn't hurting the American people. That would be the same DOJ that hired and fired people based on political persuasion. The same DOJ that gave us Alberto Gonzales.
So, let's review. The insurance industry is claiming the corrupt Bush-era Department of Justice did such a good job enforcing regulations, their near-monopolies can be ignored. And they claim that our report is based on erroneous data, but they won't mention us by name because they don't want people to focus on their role in making the health care crisis.
All I can say is, wow, they're running scared.