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Expand chart
Data: Open Markets Institute; Chart: Axios Visuals

Even the behind-the-scenes parts of the health care industry are dominated by a small handful of companies — and critics say that drives up prices for everyone.

Why it matters: The U.S. spends more than any other industrialized country for health care, largely because our prices are higher. And the monopolies that support those high prices could undermine both liberal and conservative dreams of a more efficient system.

The big picture: This is a trend that's happening at every level.

  • Hospital systems continue to merge with each other and gobble up doctors’ practices, which lets them charge more for the care they provide.
  • Insurers and pharmacy benefit managers are also merging, and are now on track to bring in more revenue than the tech industry's biggest powerhouses.

Yes, and: That trend toward concentration extends throughout the system, even into sectors that most patients never directly interact with, according to new data from the Open Markets Institute, shared first with Axios.

  • As long as we’re talking about hospitals, for example, let’s look at their suppliers: One company controls 64% of the market for syringes, according to OMI’s data. Just 3 companies control 86% of the market for IV solution. Two companies make 47% of hospital beds.
  • None of those sectors is particularly huge — syringes are the biggest, with $3.8 billion in annual revenue. But in a system that’s already not very competitive, each step without competition feeds into the next one.

“America’s health care crisis is brought you by monopoly,” Open Markets policy director Phil Longman said.

Dialysis is a particularly stark example:

  • Dialysis clinics bring in about $25 billion per year in revenue. And 2 companies — Fresenius and DaVita — control 92% of that market.
  • Fresenius is the leader, with almost 50% market share.
  • The manufacture of dialysis supplies is also concentrated around 2 companies — one of which is Fresenius. It controls 33% of that market.

This level of concentration can pose a problem for both liberal and conservative policy proposals, Longman argues.

  • Conservatives, for example, wanted to shift dialysis away from VA facilities and let veterans use private care instead.
  • Especially in sparsely populated areas, there's an argument that such an arrangement would be more efficient, Longman said — but without actual competition in the private market, the VA just ends up paying more.
  • But by the same token, large hospital systems dominate some regions entirely. They’re not only the only source of care for miles, but also the largest employer and thus an important political constituency.
  • And that could make it hard for Democrats to follow through on big payment cuts in an expanded public program or "Medicare for All."
  • “What are the chances the taxpayers get a good price if we don’t fix the monopoly problem?"

Go deeper

Tech firms' nightmare: Vanishing green cards

Illustration: Megan Robinson/Axios

Thousands of green cards are about to go to waste, leaving Google, Microsoft and other tech companies fuming — and pushing the Biden administration to ensure it doesn't happen again.

Why it matters: Tech workers have waited years for green cards that will grant them permanent legal status in the U.S. — but because of pandemic-related processing delays, they will have to wait even longer.

Ben Geman, author of Generate
19 mins ago - Energy & Environment

White House moves against "super-pollutant" in climate fight

Photo: Kena Betancur/VIEWpress/Corbis via Getty Images

The EPA is finalizing rules today that cut powerful greenhouse gases used in air conditioning and refrigeration, part of a wider new White House strategy to deter these "super-pollutants" and boost manufacturing of substitutes.

Why it matters: The EPA regulation is the U.S. part of a planned global phase-down of chemicals called hydrofluorocarbons. The global phaseout can prevent up 0.5 °C of global warming by 2100, the White House said.

FBI report likely to show record increase in murders in 2020

Illustration: Aïda Amer/Axios

If the FBI data released next week shows what's expected — that 2020 saw the highest single-year spike in U.S. murders in at least six decades — experts say the sudden job losses, fears and other jolts to society at the start of COVID-19 will likely have been the overwhelming drivers.

Why it matters: Many Democrats already feared that rising crime could hurt their party in the 2022 midterms.

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