Thursday, July 16, 2015

If a single payer system is so bad, why all the mergers?

Here is some interesting news regarding Obamacare. It seems that the insurance industry is participating in the current wave of mergers and acquisitions going on worldwide. The fuel for this M/A activity is profits from Obamacare. All of this consolidation is leading to higher premiums for everyone, but for those who can afford it, it won't matter because they own the stock of the companies that are merging.

Moyers and Company have posted an article by Robert Reich noting that while stock values and executive compensation increase, employee wages have remained stagnant in order to support the extra padding for executives. As the mergers are approved by their respective regulators, you know, the people just panting for a job at one of the companies they regulate, we will eventually see layoffs by the thousands. Layoffs are the usual result of mergers and are required in order to get the "efficiencies" that are so necessary to support executive compensation and stock dividends.

All of this would suggest that we will eventually wind up with a few "too big to fail" health insurance companies using whatever market power they have to drive up numbers while sacrificing service and support. We will in effect have a privately monopoly on health insurance with one really big government competitor: Medicare.

It is interesting to note the entire Obamacare debate was of concern that government would take over health care and that rates would rise in response. That is exactly what is happening now, but with private insurers at the wheel. But you wouldn't know that by reading the news. Why not?

Members of the boards of directors in our biggest insurance companies are also members of the boards of directors for media companies. I found that from a rather old article that describes the "interlocking directorates" between health insurers and the media and it is rather startling. Given the current wave of consolidation in nearly every industry, it would not surprise me if the practice of interlocking directorates remains as popular now as it was in 2009.

I first learned about interlocking directorates from AdBusters, home of "Buy Nothing Day", long before the internet became the norm in our lives. I actually subscribed to their magazine - I know, I'm showing my years. Back then, they crafted a very interesting chart of the interlocking directorates of major corporations between disparate industries. I was fascinated that a member of one board of directors could sit on another. It's a great way to coordinate activities between companies - oh, wait a minute. Isn't that "collusion"? Well, not if you ask the US Attorney General.

For many years insurance companies have been using their ties to the media to clamp down on any news that most Americans might have a favorable view of a single payer plan,  you know, that thing that conservatives have been fighting to avoid since President Clinton was in office?

It may well be that private insurers don't mind a single payer plan just so long as it's private, invisible and profitable.
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