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June 8, 2023
US Health Care Reform
John E. McDonough
Aug 25, 2022
Sep 15, 2021
Jun 29, 2021
Back to The Milbank Quarterly Opinion
Has anti-monopoly become a bonafide political movement in the United States? About 300 persons who gathered at the Renaissance Hotel in Washington, DC, on May 4th say yes. Representing diverse organizations and backgrounds, they assembled for a daylong exploration of progress in restoring an aggressive national effort to thwart corporate monopoly across the US economy. This initiative, coming after 40-plus years of comatose federal anti-trust action, could still derail. And perhaps not. It has energy, dynamism, and smarts. While this phenomenon is about the whole economy, make no mistake—it’s also about health care. Here I offer a brief update.
Seeing and hearing the notable speakers felt consequential and genuine. Participants included Senator Amy Klobuchar (D-MN), chair of the Anti-Trust Subcommittee of the US Senate Judiciary Committee, whose 2021 book, Anti-Trust: Taking on Monopoly Power from the Gilded Age to the Digital Age, is her statement of principle. She has been teaming up with other Democrats plus Republicans such as Senators Charles Grassley (R-IA) and Mike Lee (R-UT). They are tackling the monopolistic concert promoter LiveNation, big tech, big agriculture, big health care, and more. Last year she got the first ever technology competition bill reported favorably from the Senate Judiciary Committee. “It’s a simple idea,” she said. “We want to have competition and entrepreneurship.”
Lael Brainard, Director of the White House National Economic Council, described a “sea change in competition policy,” adding “competition is a fundamental American value and the beating heart of our economy.” President Biden’s July 2021 executive order on competition policy “turned the page” on 40 years of inactivity. Now they are working to make anti-trust/monopoly “the mission of the whole of government, not just the anti-trust agencies.” Allowing over-the-counter sales of hearing aids, cracking down on airline fees, establishing a consumer’s “right to repair,” and banning worker noncompete clauses, these are just starters. “We need to stay on this project for years to get in place competitive market structures to allow workers and consumers to thrive,” she summed up.
The Biden Administration has two anti-trust superstars: Federal Trade Commission (FTC) Chair Lina Kahn, and Department of Justice Anti-Trust Chief Jonathan Kanter. They conversed with New York Times writer Binyamin Appelbaum, whose 2019 book, The Economists’ Hour, describes U.S. anti-trust’s 40-year coma. Kahn agrees that anti-trust enforcement needs to be just one part of a broader anti-monopoly framework. “We’re looking at harm to workers,” she asserted, “and we recently challenged one hospital merger because of its impact on the workers.” She is examining other parts of the health care system “where unlawful practices keep people from getting affordable medicines such as insulin.” She views pharmacy benefit managers (PBMs) as “controlling independent pharmacies and medicines that people can’t access. That means looking upstream.”
Kanter said: “We don’t want corporations as powerful as government.” His favorite acronym for his job is “keeping hands on ‘hips’—high impact and programmatically significant.” He needs to prioritize because his anti-trust division “has 200 fewer people than we had in 1979.” He sees progress: “We’ve had exciting developments. We’re using the legal tools we’ve been given to prohibit interlocking directorates as an immediate way to change the economy. Our deterrence on mergers has been successful and we’ve seen a record number of merger abandonments.” Kanter recalled being at an anti-trust conference in 2016 or 2017, with only a small fraction of the size of this spring’s gathering. “Someone asked me then, ‘what can we do?’ I said: ‘Start a movement.’ I see that movement here and now.”
Jennifer Abruzzo, General Counsel of the National Labor Relations Board, says that her agency is working closely with the FTC and the Department of Justice Anti-Trust Division to protect workers’ organizing rights. “We enforce a pro-worker statute,” she reminds everyone. “We see a surge of communities raising their voices and demanding seats at the bargaining table. We’re taking on companies that retaliate against their workers. Employers bank on the lack of knowledge that workers have about their rights.” In Biden-world, anti-trust and pro-union are joined at the hip.
Rohit Chopra, Director of the Consumer Financial Protection Bureau, sees anti-monopoly as a core economic framework: “Anti-monopoly is not just anti-trust,” he says. “When it comes to curbing abuses, the answers may often be hiding in laws already on the books, many of which go unused.” Too often, he added, “Big repeat offenders would rather pay fines than fix their broken systems.”
Transportation Secretary Pete Buttigieg, who waffled on anti-monopoly early in his tenure, has gotten religion. Quoting his boss, President Biden, he says with conviction: “Capitalism without competition is exploitation. As long as I’ve been alive, the tendency has been more concentration and less competition. With airline deregulation (in the 1970s), many predicted that by now we would have dozens of evenly matched carriers, and now just four of them account for two thirds of the market…and they spend less on their systems’ resilience than they do for stock buybacks.”
President Biden ended the day with brief video remarks. “We want bottom up and middle out, not top down.” He credited his 2021 executive order with lowering costs for hearing aids, ending noncompete clauses, reducing drug costs such as insulin, and prohibiting junk fees. “No one likes to be played for a sucker,” he concluded.
One session’s conversation was especially riveting. Columbia Law School Professor Tim Wu, until recently the competition guru on Biden’s National Economic Council, was interviewed by Matt Stoller, the troubadour of the new anti-monopoly movement whose 700-page book, Goliath, is its bible, and whose free Substack column provides weekly updates on all activity in the monopoly-competition arena—good and bad, wins and losses. Whichever side you may be on, it is indispensable reading.
Wu suggested that “labor and small business and consumers give the movement legs and depth. More than think tanks and academics, we have to include people whose jobs are on the line to give the movement power, and to give it soul. We need more anti-trust lawyers [and judges] who did not do their legal training in 1985,” referring to the era of Judge Robert Bork, who wrote the 1978 book, The Anti-Trust Paradox, to neuter anti-monopoly. President Ronald Reagan institutionalized Bork’s pro-monopoly ideas in the 1980s.
The 2023 Anti-Monopoly Summit was organized by the American Economic Liberties Project, a new national nonprofit organized in 2020. Event sponsors included the Teamsters Union, the National Community Pharmacists Association, the National Grocers Association, Small Business Majority, and many others.
On Capitol Hill and beyond, the sharp end of this movement right now involves the Pharmacy Benefit Managers (PBM) industry. Initially established in the 1960s to help insurers, employers, and unions process claims for pharmaceuticals, they have consolidated into three multi-billion dollar giants controlling 80% of the market: Caremark owned by CVS, Express Scripts owned by Cigna, and OptumRx owned by UnitedHealthcare. The US Senate Health, Education, Labor, and Pensions Committee (HELP) under Senator Bernie Sanders (U-Vt) and Ranking Member Senator Bill Cassidy (R-LA) have approved legislation to expand PBM oversight and transparency as a first step. And Lina Kahn’s FTC has prioritized the development of an FTC package of accountability reforms. These efforts will be important tests of the clout of the new anti-trust movement.
“First they ignore you. Then they ridicule you. And then they attack you and want to burn you. And then they build monuments to you,” said trade union activist Nicholas Klein in 1918 (not Gandhi). Ignorance is over, and so is the ridicule—the references to “hipster anti-trust” have stopped. The mega-corporations and the anti-trust bar are laughing no more. This anti-monopoly resurgence could be over as soon as the 2024 elections. And maybe not.
John E. McDonough, DrPH, MPA, is a professor of public health practice at the Harvard University TH Chan School of Public Health in the Department of Health Policy and Management. Between 2008 and 2010, he served as a senior adviser on national health reform to the US Senate Committee on Health, Education, Labor, and Pensions, where he worked on the writing and passage of the Affordable Care Act. Between 2003 and 2008, he was executive director of Health Care For All, a Massachusetts consumer health advocacy organization, where he played a leading role in the passage of the 2006 Massachusetts health reform law. From 1985 to 1997, he was a member of the Massachusetts House of Representatives where he cochaired the Joint Committee on Health Care. His articles have appeared in the New England Journal of Medicine, Health Affairs and other journals. He has written several books including Inside National Health Reform in 2011 and Experiencing Politics: A Legislator’s Stories of Government and Health Care in 2000, both by the University of California Press and the Milbank Fund. He holds a doctorate in public health from the University of Michigan and a master’s in public administration from the Kennedy School of Government at Harvard University.
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