Amazon buying One Medical continues a bad trend in healthcare
Amazon’s acquisition of One Medical is the latest example of a large retailer becoming a healthcare provider. Following CVS’s announcement last year that it would provide healthcare and Amazon’s previous decision to provide in-person healthcare services through Amazon Care, the company’s latest move has raised even more concerns. alarms about corporate expansion and consolidation in a healthcare industry that for many in the United States remains prohibitively expensive.
Amazon’s acquisition of One Medical has raised even more alarms about consolidation in a health care industry that for many Americans remains prohibitively expensive.
At the same time, there has been an increasing number of hospital consolidations, including an acceleration in the number of “mega-mergers” between hospital systems. Despite its theoretical efficiencies, evidence shows that such consolidation leads to higher prices for consumers and that higher prices are not necessarily associated with better care. Hospital leaders sometimes argue that consolidation can create one-stop shops that allow for more advanced care, ignoring the reality that many rural residents are losing access to care altogether.
Our economy is driven by business-friendly policies that promise better outcomes, but these policies can actually diminish well-being and hinder equitable economic growth, as the things we need for daily life become less accessible or even of lower quality. Such policies could also help explain why the United States still has some of the worst health care outcomes among advanced economies.
The changing economic context of the health care sector raises fundamental questions: what is good care? How do we provide it? And should care be a marketable, profit-driven industry? The field of feminist economics long ago provided a lens to help us understand that care services in particular are not well served by market-based economics, and it is high time that policy makers recognize that good care and a market-based approach are actually at odds.
Health care and other forms of care work are essential to our physical and emotional well-being, but it is difficult to market care work because of the nature of the work itself and because the benefits of this work is often harvested over the long term and delivered through complex teams. At the same time, those who need such labor the most, such as the elderly and young children, are often the least able to afford it.
This is why we need to treat care work as a public good, that is, a good or service that works best when it is easily accessible to all members of society and when it is not there is no competition among consumers to receive or use it. A classic example is roads. We all use them, and they are best maintained by public maintenance. Above all, public provision of public goods makes sense because they have positive externalities, meaning they generate economic activity and growth. Roads help us all get to work and shop, which stimulates economic activity.
We all need care at some point in our lives, so the need for care work is universal. And providing adequate care has many positive externalities: it ensures that children can grow into happy, productive adults and that older people can maintain their independence without depending too much on their families. Furthermore, these so-called externalities of care work are also best served when they can be ‘internalised’, which is possible with sufficient public support and guidance to ensure they are accessible to all and at a level high quality at all levels. And since the evidence tells us that consolidation and the pursuit of profit – or even an emphasis on cutting costs – should not be a priority for public goods, care work would benefit from public subsidies, up to and including including universal health care.
Workers in states that had more generous Medicaid expansion were more likely to move into higher-paying jobs because they weren’t worried about a coverage gap.
The benefits of expanding accessibility to health care are innumerable. Striking study finds workers in states that had more generous Medicaid expansion as a result of the Affordable Care Act were more likely to move into better-paying jobs when they were healthy because they weren’t worried to fall into a coverage deficit. But expanding access to health care requires ensuring that health care workers are well paid. Those working in care face a pay penalty across the board, and healthcare workers are no different. In the example of hospital mergers, research has found that wages for hospital workers decline after consolidation. This trend has been particularly troubling during the pandemic, as these essential workers have not been well compensated for the risks they have taken.
The acquisition of Amazon does not necessarily portend these negative effects of commodified and increasingly monopolized health care, but given general trends, there should be a much higher level of control. Policymakers and antitrust authorities need to pay close attention to the outcomes when a healthcare provider becomes a subsidiary of a corporate conglomerate already known for poor working conditions and questionable business tactics.
Raising labor standards in health care and all care workers, providing public support to those industries that provide public benefit, and scrutinizing business practices and their subsequent outcomes are all essential to ensuring that we can move towards a economy where each individual can achieve their full potential. Clearly, despite claims to the contrary, pro-firm policies that promise the allocative efficiency of markets will not get us there – and will not.