Health Insurers, HMOs and Automotive History

After World War II, a Democratic presidential economic advisor observed that mergers and acquisitions in the auto industry left concentrated power in fewer companies (GM, Ford and Chrysler) which made them much easier for the government to control. Government controlled and regulated them, competitors have appeared, and the big three are struggling to survive.

We have seen merger and acquisition after merger and acquisition in the health insurance industry with relatively few major players still standing. Well-paid industry executives and advisors forgot to study industrial history, and their own vulnerability, when they reduced the number of viable insurers and HMOs. As they hungrily gobbled each other up, they did not recognize they were committing industrial suicide. If the election in November of 2008 results in a Democratic victory, the health insurance industry is ripe, as never before, for much tougher government control and regulation. And who is going to speak in behalf of the health insurance industry? Certainly not employers and unions who have seen unfilled promises of cost control and more appropriate provision of health care to their employees. Certainly not religious organizations and small governmental entities which are struggling to provide care to the uninsured and poor. Certainly not the public which readily expresses its anger and skepticism (go to a movie and hear the audience snicker when the "HMO" is used disparagingly). Not the physicians and other health care providers who have seen the quality of the service that they are paid to provide slide under the financial pressure of health insurers which cost-shift their way out paying for reasonably expected and necessary health services.

The industry insurance/ppo industry has set itself up for control by government on government's terms (regulators do not make fancy salaries and are not particularly sympathetic to those who do) and has, through its expression of greed, has made itself as vulnerable - as GM, Ford and Chrysler were in post-war America. Oh, if they had only paid attention to history!