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Why Does a Hospital Monopoly Want to Re-Open the Economy?

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SubscribeSign inShare this postWhy Does a Hospital Monopoly Want to Re-Open the Economy?mattstoller.substack.comCopy linkTwitterFacebookEmailMay 9, 2020Share this postWhy Does a Hospital Monopoly Want to Re-Open the Economy?mattstoller.substack.comCopy linkTwitterFacebookEmailHi,Today I’m changing the format. I want to cover a bunch of stories more lightly, instead of writing one main big essay. Let me know what you think. I’m going to cover hospital monopolies lobbying to reopen the economy, the attack on the World Trade Organization, and an action by DOJ Antitrust on a criminal antitrust settlement and one on a giant textbook merger. I also had a bit of a public tiff over whether the Federal Reserve is a mere innocent plumber, or an architect of unfair bailouts to corporate America.And now…Monopoly Hospitals: Getting back to normal, as UPMC is trying to do, isn’t necessarily wrong. It is important to reopen the economy, and people shouldn’t delay care, especially for cancer or critical non-Covid conditions. Certainly the system has taken steps to mitigate infections inside its hospitals and various facilities, and I’ve also heard from some of you who are patients at UPMC that you like the care you receive. But there is a conflict of interest at work, because UPMC’s financial goals align with reopening their non-Covid practice. UPMC generates revenue from high-cost outpatient elective procedures; 46% of the revenue of hospital systems in Western Pennsylvania come from such procedures. And the nature of the market structure for hospital services means there’s a lot of pressure to open back up this stream of cash.Now we’re seeing what happens when these necessary but overpriced procedures go on hold. Hospital executives start lobbying aggressively to reopen as soon as possible. Is that a good idea? I am not sure. But there’s surely a conflict of interest when the hospital executive says it is, even if that executive wears a white coat and carries a stethoscope.Federal Reserve: Plumber or Planner? Language matters. And the description you pick, plumber or planner, is a political choice.An End to the World Trade Organization? In terms of the broader point, what Senator Hawley is saying is not protectionism, but calling for a return to the New Deal framework of fomenting trade among democracies, while protecting critical supply chains and domestic production. Strategic trade management, he argues, is part of geopolitics, and it’s time to be deliberate about those choices again.Trump DOJ Antitrust Division Shows Crime Pays: As one antitrust lawyer told me, “When its own interests are served, the DOJ knows well how to interject itself into civil antitrust actions, and to make ex parte, sealed filing with the court. How can it explain failing to do so here? Congress ought to ask.” Textbook and AntitrustThanks for reading. If you see examples of market power in this pandemic, let me know.cheers,Matt StollerHey Matt,Big fan of the blog here. I couldn’t help but notice in this edition the comment that “there’s little innovation coming out of Facebook these days” and felt obliged to point out evidence to the contrary.&nbsp;I am definitely not a fan of FacebookYou could argue that this innovations are inadequate for one of the biggest companies in the world, but that’s a different conversation.Regards,MaxThis is a fair point. What I meant to say is that Facebook isn’t innovating around its social networking user experience, which is why TikTok was able to take a Vine-like experience and explode in popularity. Facebook’s control of the advertising market killed fair competition in the U.S., and meant that competitors could emerge only if they were subsidized to lose money for a long time. That’s why TikTok is part of a Chinese corporation.To take Max's argument on more directly, I would analogize Facebook as akin to General Motors and Ford in the 1960s. Both corporations did do engineering innovations, but very little of it ended up improving their cars. Only in the 1970s and 1980s, when they faced Japanese competitors (who often used American innovations that American corporations had refused to incorporate into products), did they finally begin to retool. Had GM not rolled up much of the auto industry in the 1920s, or had the DOJ broken up GM in the 1950s or 1960s (as is nearly tried to do), American carmakers would not have gone through such pain and cost hundreds of thousands of jobs.This dynamic isn’t quite the same as Facebook. After all, Facebook is providing an engineering public good, and a lot of others get to use it. But the production of knowledge about machine learning is not inherent to an advertising monopoly. Nor are “really interesting computational social science papers” coming out of Facebook Research division a sign of innovation. In fact Facebook’s control of what should be publicly available data stores means that the corporation is likely throttling the amount of research that could happen. Only those at Facebook, or those who get Facebook’s permission, are allowed to play with this public data. So while interesting papers are coming from people at Facebook who can use Facebook-controlled data for research purposes, that’s really just a function of the fact the Facebook is in command of what should be public resources. In other words, it’s like saying “the glass isn’t nearly empty, it’s one tenth full!”Like this postShare this postWhy Does a Hospital Monopoly Want to Re-Open the Economy?mattstoller.substack.comCopy linkTwitterFacebookEmail17 CommentsFor your security, we need to re-authenticate you.Click the link we sent to , or .Expand full commentExpand full commentNo posts© 2022 Matt Stoller ∙ ∙ &nbsp;is the home for great writingThis site requires JavaScript to run correctly. Please or unblock scripts

SubscribeSign inShare this postWhy Does a Hospital Monopoly Want to Re-Open the Economy?mattstoller.substack.comCopy linkTwitterFacebookEmailMay 9, 2020Share this postWhy Does a Hospital Monopoly Want to Re-Open the Economy?mattstoller.substack.comCopy linkTwitterFacebookEmailHi,Today I’m changing the format. I want to cover a bunch of stories more lightly, instead of writing one main big essay. Let me know what you think. I’m going to cover hospital monopolies lobbying to reopen the economy, the attack on the World Trade Organization, and an action by DOJ Antitrust on a criminal antitrust...

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