The evolving regulatory balance, of course, remains unsteady and not fully charted. Possible settings could range all the way from eventual "capture" and protectionism for the largest producers that last longest at the bargaining table, to gains from trade in political markets to override economic ones, and to the most likely one in this case - symbiosis. Although some symbiotic relationships (obligate ones) require both parties to depend entirely on each other for survival, more "parasitic" ones benefit one party while the other is harmed. It remains to be seen whether the government side of the ACA relationship with the health industry can succeed instead in achieving ectosymbiosis, in which it lives on its junior partners in the health industry, or even "inside" of them. n8
Market Imperfection vs. Government Failure
Most apologists for a heavier role for government intervention in health care usually begin by asserting that "health care is special" and its markets inevitably are riddled with imperfections that justify greater regulation. Yet health policy in the U.S. has spent decades trying to implement such corrective strategies, with a mounting record of government failure. Excessive levels of third-party payment, lack of price transparency, barriers to entry, opaque cross-subsidies, unsustainable unfunded liabilities in health entitlement programs, rewarding volume rather than value, lagging adoption of information technology, excessive reimbursement and inadequate reimbursement - these are arguably greater reflections of flawed public policy more than of malfunctioning private markets.
The two sectors of the U.S. economy traditionally plagued by rising costs, uneven quality, poor value, and disparities for decades have been health care, and primary and secondary education - the two most heavily regulated and publicly subsidized ones. Yet the next doses of stronger government-centric remedies are always promised to work better than the last ones.
For example, the ACA promises that
ACA advocates warn that providing too many health care choices in private markets will cause information overload for hapless consumers, who need a handful of more standardized price, coverage, and treatment options. Evidently, similar mental processing constraints do not apply to purchasers or providers facing tens of thousands of pages of often late-arriving and shape-shifting new regulatory guidance under the ACA.
This Time Is Different?
Antitrust enforcers should be congratulated for recently ending their long losing streak in the courts in challenging hospital mergers seemingly likely to reduce competition and raise prices. But prospects for addressing competition problems in the ACA-era of health care markets through conventional antitrust enforcement remain limited. Rolling back previous hospital mergers is quite difficult legally, impractical administratively, and often counterproductive economically. The hospital consolidation horse not only left the barn several decades ago; it's taken several laps around the track.
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