Direct Primary Care coupled with Cash Pay Centric Health Plans eliminates costly middlemen, providing better, more efficient health care at half the cost of traditional managed care plans.
The Rise of ‘Big Health’: Over the past decade, there has been a significant increase in the presence of intermediary companies, often referred to as “Big Health,” in the American healthcare industry.
These companies do not manufacture drugs nor provide direct treatment to patients. Instead, they act as middlemen—insurers, pharmacies, drug distributors, and pharmacy-benefit managers (PBMs)—playing a crucial role in the healthcare supply chain.
These intermediaries have expanded their influence, with their combined revenue making up approximately 45% of America’s healthcare expenditure, up from 25% in 2013.
Who profits most from America’s baffling health-care system? Not Big Pharma.
By The Economist – On October 4, more than 75,000 employees of Kaiser Permanente, a large health-care chain, began a three-day strike. The walkout was the biggest in the history of America’s health sector, and called attention to the staffing shortages plaguing the country’s hospitals and clinics. Read Full Article…
VBA Article Summary
- The Rise of ‘Big Health’: Over the past decade, there has been a significant increase in the presence of intermediary companies, often referred to as “Big Health,” in the American healthcare industry. These companies do not manufacture drugs nor provide direct treatment to patients. Instead, they act as middlemen—insurers, pharmacies, drug distributors, and pharmacy-benefit managers (PBMs)—playing a crucial role in the healthcare supply chain. These intermediaries have expanded their influence, with their combined revenue making up approximately 45% of America’s healthcare expenditure, up from 25% in 2013.
- Impact of Vertical Integration: As profit opportunities within their core operations narrow, Big Health companies have sought growth through vertical integration, acquiring various entities along the healthcare supply chain, from clinics to pharmacies. While these acquisitions may improve efficiency and revenue streams for the integrated firms, concerns have emerged about the potential negative side-effects, including increased prices, lower quality of care, and anti-competitive practices. For example, prices often rise after hospitals acquire physician practices without any concurrent improvement in the quality of care provided.
- Challenges and Potential Disruptions: With the enormous profits generated by Big Health companies, new entrants are seeking to disrupt the industry, positioning themselves as consumer-friendly alternatives. Companies like Bright Health Group, Oscar Health, and Mark Cuban Cost Plus Drug Company are looking to bring transparency and lower costs to consumers. Amazon has also shown interest in healthcare, expanding its services even after the failure of its joint venture, Haven Healthcare. However, these newcomers face significant challenges due to the complexity of the healthcare business and the entrenched position of existing firms, making disruption a slow and difficult process.
