Amazon’s acquisition of One Medical is the latest example of a large retailer moving into the role of a health care provider. Coming after CVS’ announcement last year that it would be providing health care and Amazon’s previous move to provide in-person health care services through Amazon Care, the company’s latest move has raised even more alarms about corporate expansion and consolidation in a health care industry that for many in the United States remains prohibitively costly.
Amazon’s acquisition of One Medical has raised even more alarms about consolidation in a health care industry that for many Americans remains prohibitively costly.
At the same time, there has been an increasing number of hospital consolidations, including an accelerating number of “mega-mergers” among hospital systems. Despite its theoretical efficiencies, evidence shows that such consolidation leads to rising prices for consumers and that higher prices are not necessarily associated with better care. Hospital executives sometimes argue that consolidation can create one-stop shops that allow for more advanced care, which ignores the reality that many rural residents lose access to care altogether.
Our economy is driven by pro-corporation policies that promise better outcomes, but these policies may actually diminish well-being and hold back equitable economic growth, as the things we need for daily life become less accessible or even of lower quality. Such policies might also help explain why the U.S. still has some of the worst health care outcomes across advanced economies.
The shifting economic backdrop of the health care sector raises fundamental questions: What is good care? How do we provide it? And should care be a marketized and profit-driven industry? The field of feminist economics long ago provided a lens to help us understand that care services in particular are not well-served by market-based economics, and it is long past time that policymakers recognize that good care and a market-based approach are actually at odds.
Health care and other forms of caring labor are critical for our physical and emotional well-being, but it’s hard to marketize care work because of the nature of the labor itself and because the benefits of that labor are often reaped over the long term and provided through complex teams. At the same time, those who have the greatest need for such labor, such as the elderly and young children, are often the least able to pay for it.
This is why we need to treat care work as a public good, meaning a good or service that functions best when made readily available to all members of society and where there is not competition among consumers to receive or use it. A classic example is roads. We all use them, and they are best maintained through public upkeep. Critically, the public provision of public goods is sensible because they have positive externalities, meaning they generate economic activity and growth. Roads help us all get to work and go shopping, boosting economic activity.
We all need to be cared for at some point in our lives, so the need for care work is universal. And providing adequate care has many positive externalities: It ensures children can develop to be happy, productive adults and the elderly can maintain independence without relying too much on their families. Further, these so-called externalities of care work are also best served when they can be “internalized,” which is possible with sufficient public support and guidance to ensure they are accessible to all and at a high standard of quality across the board. And since evidence tells us that consolidation and the profit motive — or even a focus on cost cutting — should not be a focus for public goods, care work would benefit from public subsidization, up to and including universal health care. Workers in states that had more generous expansion of Medicaid were more likely to switch into higher paying jobs because they weren’t worried about a coverage gap. The benefits of expanding health care accessibility are myriad. One striking study finds that workers in states that had more generous expansion of Medicaid following the Affordable Care Act were more likely to switch into higher paying jobs when they were healthy because they weren’t worried about falling into a coverage gap. But expanding health care access requires ensuring health care workers are paid well. Those in care work face a pay penalty across the board, and health care workers are no different. In the example of hospital mergers, research has found that hospital worker wages decline after consolidation. This trend has been particularly troubling through the pandemic, as these essential workers have not been well compensated for the risks they’ve been taking. Amazon’s acquisition does not necessarily portend these negative effects of marketized and increasingly monopolized health care, but given the overall trends, there should be a much higher level of scrutiny. Policymakers and antitrust enforcers need to pay close attention to the outcomes when a health care provider becomes a subsidiary of a corporate conglomerate already known for poor working conditions and questionable business tactics. Raising labor standards in health care and all caring labor, providing public support for these industries that provide public benefit and closely scrutinizing business practices and their subsequent outcomes are all critical to ensuring we can move toward an economy where every individual can achieve their full potential. It’s clear that despite claims otherwise, pro-corporate policies that promise the allocative efficiency of markets don’t —and won’t — get us there.
Kate Bahn
Kate Bahn is chief economist at the Washington Center for Equitable Growth. 
