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It’s Hard Out Here for the Health Care Industry

Graphic by nDevilTV

Graphic by nDevilTV

So, Obama and the Democrats have triumphed in their heroic struggle to protect the little guy, right?  The rapacious health care industry is licking its wounds and wondering how it’ll ever survive, right?  Umm… not so much.  As David Ignatius points out:

The winners included many hospital and nursing home chains. Also up were some major drug-makers and drug distributors. And while results for health insurers were mixed, some of the biggest and best-managed companies, such as Aetna and United Health, saw gains.

Attempts to decode the stock market are often delusional, but here’s what I think Wall Street is saying: The health-care sector can anticipate a whole lot more government money headed its way, and the new legislation won’t do much to cut costs – or health-industry revenues and profits.

No kidding.  After all their rhetoric about how terrible the health care industry is, Obama and the Democrats have just delivered them a captive market of 16 million new customers – new customers who will actually serve as a passthrough for $464 billion (p. 22 of CBO PDF) of government money to the health care sector over the next ten years.  And all without any competition or cost controls to keep make them honest.

True, the insurance industry will be required to spend 80-85% of that on health care (or maybe not), but that still leaves them with at least $70 billion… and the hospitals and drug companies with the rest.  And that’s not even counting what their millions of new customers will have to pay out of pocket for premiums and copays and deductibles.

So while the Republicans talk tough right now about how they’re going to repeal this horrible bill which socialistically takes over the health care industry by throwing staggering sums of money at it, it’s just not ever going to happen.  Not because it would be politically unpopular, but because AHIP and PhRMA simply won’t let them.  It’ll be like watching a bizarro mirror image of the death of the public option, as repeal magically shrinks from a must-have moral-imperative campaign promise to a tiny expendable sliver of the GOP’s grand tort reform/HSAs vision.

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