“The Way Insurance Companies Have Rigged Our Health Care System, They’re Probably Going to Emerge as Financial Winners from This”

Author and former health insurance executive Wendell Potter explains to ProMarket why the employer-based health care system in the US is “collapsing” and why health insurance companies see the Covid-19 crisis as a “net saving.”  

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The Danger of No Antitrust Enforcement: How a Merger Led to the US Ventilator Shortage

In order to enhance its market power, a large medical device manufacturer and distributor named Covidien bought up the small and competitive Newport Medical in 2012, canceled its federal contract to manufacture 40,000 ventilators, and shut down its ventilator business. That acquisition was part of longstanding consolidation in the medical industry that left the United States unprepared to face the pandemic.

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The Darkest Side of Monopsony: The South Korean Case

“Chaebols”, large business groups controlled by founder families, are usually considered a crucial ingredient of South Korea’s economic miracle. But after a process of consolidation, big chaebol firms such as Hyundai established exclusive supply chains with suppliers of parts and components and began to engage in price squeezing and intellectual property extortion in bargaining with its suppliers. 

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Option-Based Credit Spreads Signal a Recession, but the US Stimulus Will Soften the Blow

Over the past month, option-based credit spreads spiked and remain at elevated levels. The surge signals that a recession is at our door, but its dampening over the past week suggests that the unprecedented stimulus may mitigate the blow. In the last week, the likelihood of a recession in the next 12 months has come down from 100 percent to 73 percent. 

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The Stimulus Package Is Too Expensive and Poorly Targeted: The Waste Contained in the CARES Act

A cost-effective stimulus to mend the effects of a 24 percent drop in GDP would cost no more than $1.3 trillion over a 6-month period. The bill that Congress just approved is much bigger because it allocates resources to people who are not necessarily affected and rescuing businesses, like Boeing, that are in trouble for pre-existing reasons.

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The Case for Lockdown: in Italy’s Lombardy, It Can Reduce Covid-19 Potential Fatalities from 160,000 to 25,000

According to an analysis by Bocconi University professor Carlo Favero, the number of people infected with the coronavirus in Lombardy, Northern Italy, is 120,000, while official figures put it at around 24,000. Hospitalizations will peak in the second week of April. With a fatality rate of 2 percent, casualties will still rise from the current 5,400 to 25,000. The alternative scenario, with no lockdown, would be much more dramatic, with a predicted cumulative toll of 160,000.  

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America’s Broken Health Care System Is the Biggest Obstacle to Containing the Coronavirus

Over the past few weeks, it has become abundantly clear that the US health care system is uniquely ill-equipped to deal with a crisis of this magnitude. For years, physicians, economists, and health advocates have warned that the American health care system is a disaster in waiting. Now the disaster is here.  

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The Covid-19 Bailout That Big Business Is Lobbying for Could Make America Unrecognizable

Supporting industries is necessary to mitigate the economic impact of the pandemic. But using the coronavirus as an excuse, Boeing and other companies are trying to get taxpayers to foot the bill for their managerial errors. It is not too late to put a limit on corporate subsidies.

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Elon Musk Wants to Get Paid. He Will Get His 2019 Bonus Thanks to an Accounting Magic

In March 2018, Tesla’s Board of Directors granted Musk a potential bonus of 20,264,042 stock option awards under a  plan that uses “adjusted EBITDA” as one of its metrics. According to general accounting principles, Tesla recorded a 2019 net loss of $862 million, but thanks to using different accounting principles this loss became an adjusted EBITDA profit of $2.985 billion.

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How US Regulators Allowed Google and Facebook to Become Dominant

The UK’s Competition and Markets Authority recently criticized Google and Facebook’s excessive market power. American regulators, on the other hand, have allowed them to consolidate their influence with almost no restrictions, and the Justice Department’s chief antitrust enforcement official has recused himself from the Google investigation because he used to be a Google lobbyist.

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