Newtown, CT – March 3, 2017
While the thinking class conceives of revolutions, the working class launches them – As we reflect on the working class revolution that swept the world a century ago, it seems that the conditions are met for a new one today. Consider that the women and men that power the country’s domestic product, working in mostly small to medium-sized companies, that many of them, as entrepreneurs, fuel the innovation that will create tomorrow’s wealth, are consistently and purposefully being crushed by the mighty. It’s not just that the mighty have achieved unrivaled domination in their respective markets, but they also seem to be colluding across industries to choke and crush all who may be perceived as rivals. In healthcare, the dominant health plans and providers control their markets and set price. By leaving the exchanges, they have assured the death spiral of would-be competitors, and now they are working hard to lobby Congress as a replacement to the ACA is being crafted. Helping them out are the large employers of the country, who, as companies, dominate their own markets. They are marshalling their forces to stop any attempt at democratizing health benefits and making health care less expensive. All serious economists and any sensible worker understands that protecting the privileged few is coming at the expense of the many, so why are these companies fighting common-sense reform? Because it’s in their best interest.
What this means to you – The mighty of a century ago, whose might rested on the crushed lives of those they dominated, got their come-uppance because the working class rose up and said no more. Today, the mighty are colluding to keep health care prices high and going higher. After all, does IBM, Comcast, or AT&T really care about another $1000 in employee health care costs? No. Their balance sheets can easily withstand those increases, but that’s not true for the millions of small and medium-sized companies that are designing the disruptive innovations that may displace the mighty. Health benefits reform and the health market’s reform can only come if there is the freedom and flexibility to make it happen. As Clay Havighurst expressed it recently in the WSJ, populist reform of health care could unleash the creative destruction needed to bring about radical change, the needed revolution. A recent paper highlighted yet again the tremendous variation in prices paid by insurers for joint replacements. Does anyone reading this missive believe that the health plans aren’t aware of these price differences? Do you believe that the large employers of the country are equally unaware? Of course not. And yet what have they done about it? Send employees halfway across the country to local monopolists whose egregious prices in their markets enable them to negotiate a low price for a handful of new patients in exchange for enhancing their bragging rights about being a “center of excellence,” and thus justifying their high local prices. It’s not a coincidence. Every time health care prices rise, the little guy pays the price, and that’s one less competitor the mighty have to worry about. A century ago a small number of ruling families across continents colluded to keep a tight rein on power. Today, large companies, large health systems, and large health plans have simply taken over that role. And so it’s time for the working class, the small and medium-sized companies across the country, to open up its eyes to this reality and to rise up and launch a new revolution. Because a revolution is the only way to destroy the yoke of oppression.