United Hack Exposes The Problem With Health Care Monopolies

In a bid to win reelection, the Biden administration keeps trying to sell the country on all the supposed benefits of Obamacare. Before continuing their sales campaign, they might want to check in with the doctors’ offices struggling to make payroll.

For over a month, the multitrillion-dollar health care sector has had to respond to a hack on a payment processor owned by UnitedHealthGroup, the nation’s largest insurer. Axios reported that hospitals, doctors, medical equipment suppliers, and pharmacies are collectively losing as much as $1 billion a day. The chaos is not only caused in no small part by the industry consolidation sparked by Obamacare, but it may make the problem even worse.

Too Big to Fail Redux?

Ignore for a moment the fact that Change Health Care, the UnitedHealth affiliate whose payment processing operations were attacked, reportedly paid $22 million to the ransomware group behind the hack — which will of course only encourage future efforts to target health care entities in cyberspace. The real issue comes via the size and breadth of the network being hacked.

Consider that Change processes 15 billion medical claims per year — the most by any organization in the country. In raw terms, that amounts to more than 41 million medical claims per day. When a company is processing what amounts to a medical claim for more than 1 in 10 Americans each and every day, that is bound to extend its reach far and wide in the health care system.

And so it has proved. Doctors and hospitals are struggling to manage cash flow without regular payments from insurers, as the system for processing payments remains clogged. Patients and pharmacists alike are struggling; pharmacists cannot process a patient’s insurance to determine the proper co-payment or co-insurance, and some patients are having to pay large sums out of pocket (that is, if they can afford to do so) and hope their insurance reimburses them eventually.

Encouraging More Consolidation

How did we get to this point? Why was the nation’s largest health insurer able to buy such a critically important payment processor? Good question.

For years, Obamacare has encouraged hospitals,…