About Our Corrupt COVID Supply Chain
Matt Stoller's antitrust blog should be required reading for every American. Today's topic is the corrupt system behind COVID medical shortages. Here's an excerpt:
Today, corruption in these markets is so extreme that hospital executives themselves are often offered a cut of the fees from GPOs. In 2013, one analyst said that “many hospital executives who are part of the Premier alliance have learned to rely on that share back as an integral part of their annual compensation.” In other words, hospitals are buying supplies at inflated prices, and those suppliers use some of that extra money in direct bribes to hospital executives.The legalization of kickbacks happened as a series of mergers in the 1990s consolidated power within the industry. In 1995, Premier Health Alliance, American Healthcare Systems, and SunHealth Alliance merged into the nation’s largest GPO, Premier. By 2017, the giants in the industry - Vizient, Premier, HealthTrust, and Intaler - came to manage $300 billion of hospital purchasing for 5000 health systems, or 90% of total medical supplies in the United States. These GPOs have deals with the three major distributors - McKesson, AmerisourceBergen and Cardinal Health - which precludes any smaller distributors from getting into the business. At this point, 90% of generic medicines are bought by just four firms.
And this consolidation and restructuring of hospital buying has ruined the American supply chain, and prevented the ability to rebuild it.