Breaking Up “Big Medicine” Requires Going Further

Washington says it wants to break up “Big Medicine.”

But it’s still avoiding one of the biggest concentrations of power in healthcare.

When Senators Josh Hawley and Elizabeth Warren introduced legislation targeting vertical integration among insurers, PBMs, and other intermediaries, it was an important step. It takes real political courage to challenge the economic structures that dominate healthcare.

But after looking at the details, it’s hard not to feel the proposal has already been watered down.

If policymakers truly want to restore competition, this was a moment to strengthen structural reform, not soften it.

Three areas in particular should have gone further:

---True structural separation between payers, PBMs, and providers.
---Real divestiture requirements if vertical integration distorts incentives.
---Enforcement with teeth, so market power can’t simply reorganize around regulation.

Healthcare markets work best when independent organizations compete on outcomes, service, and price.

But there’s an even bigger issue still being avoided.

If Washington wants to break up “Big Medicine,” it cannot stop with insurers and PBMs. It also has to address large health systems. Across the country, hospital systems have quietly built vertically integrated structures of their own—acquiring physician practices, outpatient facilities, ambulatory surgery centers, urgent care networks, and sometimes even operating health plans and pharmacy businesses.

In many markets, a single system now controls significant referral flow across an entire region. That isn’t integration.
That’s market power. And it has the same effect as a monopoly.

If vertical integration is a problem on the payer side of healthcare, the same principle should apply on the provider side. Otherwise, we’re only solving half the problem.

The bipartisan effort to start this conversation deserves credit. But the real opportunity is bigger: Restore a healthcare marketplace where providers compete on value, patients understand what they’re buying, and no single organization can prevent competition.

Then competition will transform healthcare.