Anthem Inc. is in the process of trying to buy Cigna Corp. For anyone who doesn’t know these are Giant Health Insurance providers. There are only a handful of these companies. The story is that consumers will benefit because cost savings will be passed on to patients.
This is the same logic that was employed in Texas as tort reform was instituted. Will lower costs be passed on to consumers? Since all of economics is based on one incentive, self interest, there is no chance at all that there will be savings for consumers. Corporations merge for the purpose of making additional profits and there is no other reason. There is nothing wrong with two corporations merging in order to improve profits. It is wrong to point to a benefit for patients when that is not even a possibility.
What passes for health insurance is actually a payment management system that extracts money out of patients and physicians. Corporations like Anthem and Cigna have no true utility to society. They are a cause of high health care prices. Government guarantees their market. The insurance companies simply skim income off of everyone by using government to force patients and doctors to deal with them. Americans don’t seem to mind but they are being impoverished by this system. In the long run these entities will not survive but they are inflicting a lot of pain in the mean time.
Monopolies, even those created by government, eventually destroy themselves. The process is slow but consumers are constantly searching for substitutes for what monopolies provide. Remember that “only phone company in town.” High prices for land lines and high long distance rates helped usher in the mobile phone. One of the consequences of squeezing physicians is that it creates an incentive to charge patients without providing treatment. Who has not had the experience of going to a family physician and being referred to a specialist for a run of the mill condition. This is how mass marketing medicine works. Herd them in, herd them out and collect collect a fee. This is not a preference of doctors. They have a choice of getting paid for not treating patients or taking a loss. Actual health care is becoming rare.
What happens next? People everywhere are discovering the curative nature of everything from Aloe Vera to oral supplements made from cannabis oil. Watch for doctors in foreign countries to start offering Skype appointments. More Americans will start traveling to Mexico and other countries to get treatment. The black market drug business will flourish even more than it already is. Eventually a few doctors will figure out that they can make a good profit by offering cash patients a hefty cash discount. What is a physician’s profit for an office visit? It is probably less than a patient’s insurance copayment
Don’t look for Americans to complain. They have been told they have national health care by authoritative elected representatives. It may take the average Joe twenty years to figure out that there can be a difference between what a system is called and what it actually does. For those of us who are euphemism free and use commonsense this is not a problem. There are not many of us.