I have been aware that that large health insurance companies have been expanding by the purchase of PBMs and also entering the market as providers (see, for example: UnitedHealth Group to Launch Its Own Variant of an EHR in 2019; OptumHealth, a Division of UnitedHealth, to Offer Virtual Patient Visits Nationwide). However, I did not really have a sense of their size compared to other sectors of U.S. business. Thus, a recent article on this topic caught my attention (see: Health insurance is as big as Big Tech Data). Below is an excerpt from it:
The 5 largest conglomerates combining health insurance and pharmacy benefits are on track this year to be bigger than the 5 preeminent tech companies.... Anthem, Cigna, CVS Health, Humana and UnitedHealth Group cumulatively expect to collect almost $787 billion in 2019, compared with $783 billion of projected revenue for Facebook, Amazon, Apple, Netflix and Google....The tech companies cumulatively were 5 times more profitable than the health care companies in 2018 and are projected to be 3.5 times more profitable this year. There's more money to be made selling smartphones and online ads than acting as a health care middleman. Health insurers and pharmacy benefit managers pay out a vast majority of their revenues to hospitals, doctors and drug companies. But insurers and PBMs are still turning large overall profits. And a delay in an Affordable Care Act tax is expected to create a big windfall for the insurance industry this year. Companies are working behind the scenes to get that tax delayed again for 2020 or permanently repealed. It's also worth remembering that health insurance giants today do a lot more than just pay out claims for medical care and prescriptions. UnitedHealth owns surgery centers, doctors' offices, consulting shops and data-analyzing services. CVS, which just bought Aetna, brings in a lot of money through its retail pharmacies and in-store clinics.
Because healthcare constitutes more than 18% of the U.S. GDP (see: U.S. national health expenditure as percent of GDP from 1960 to 2018), it probably should not come as a surprise that Anthem, Cigna, CVS Health, Humana and UnitedHealth Group cumulatively expect to collect almost $787 billion in 2019 compared to $783 billion of projected revenue for Facebook, Amazon, Apple, Netflix and Google. However and as mentioned above, much of the revenue collected by these companies is disbursed to hospitals, doctors, and drug companies. Also note that the global pharmaceutical industry reached unprecedented heights in 2017 estimated at an astounding $1.11 trillion (see: Who are the top 10 pharmaceutical companies in the world? (2018)) Putting all of this together suggests that it's going to be extremely difficult to hold healthcare spending in check in the U.S. even if we were to have an administration that was willing to make this a national policy initiative (which we do not). The corporate lobbying efforts and expenditures against healthcare reform will be staggering.
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