Two Senators Want to Break Up Big Medicine. Their States Perfected It First.
Massachusetts banned new surgery centers for 47 years. Missouri regulates 14 healthcare services through Certificate of Need. Their bill targets their personal enemies, not those of the United States.
Two senators just introduced a bill to break up healthcare monopolies.
One represents a state that regulates 14 healthcare services through Certificate of Need. The other represents a state that banned new surgery centers for 47 years.
Mark Cuban called it a “no-brainer.” 6,700 of his 8.5 million followers agreed. That’s 0.08% engagement.
They are not fighting the monopoly.
They are the monopoly’s landlords.
IN TODAY’S ARTICLE:
The Break Up Big Medicine Act borrows from Glass-Steagall to separate insurer-PBM-physician conglomerates. The structural logic is sound. The scope is not.
The bill ignores $275 billion in annual subsidies flowing exclusively to hospital systems, including 340B ($81.4B), Medicaid supplemental payments ($90.1B), and nonprofit tax exemptions ($37.4B).
Both sponsors represent states with some of the most aggressive Certificate of Need laws in the country. Massachusetts banned new ambulatory surgery centers for 47 years.
The real reform agenda requires five actions, not one. This bill delivers a press conference.
Glossary at the bottom of today’s article.
What the Bill Actually Does
Yesterday, Senators Josh Hawley and Elizabeth Warren introduced the Break Up Big Medicine Act, and the internet erupted on cue. CBS News ran it as an exclusive. Substacks across the healthcare landscape declared it the beginning of the end for corporate medicine. A supermajority of voters, 72% of Democrats and 70% of Republicans, already support breakup legislation, according to YouGov polling.
The energy is real. The diagnosis is correct. And the prescription misses the tumor entirely.
The structural logic of the Break Up Big Medicine Act is sound. It borrows from the Glass-Steagall playbook, the 1933 Banking Act that separated commercial and investment banking after the Great Depression, and applies it to healthcare’s vertically integrated conglomerates.
The bill prohibits a parent company from simultaneously owning a physician practice or management services organization and a PBM or insurer. It prohibits prescription drug or medical device wholesalers from owning physician practices. Companies have one year to comply or face disgorgement of profits and forced asset sales. The FTC, HHS, DOJ, state attorneys general, and private parties can all bring enforcement actions.
The targets are obvious and overdue.
I’ve written about them and hate them more than 99.9% of Americans.
UnitedHealth Group owns the insurer, the PBM (OptumRx), the bank (Optum Bank), and over 2,000 physician organizations.
CVS Health owns Aetna (insurance), Caremark (PBM), and the nation’s largest retail pharmacy chain. Cigna’s 2018 acquisition of Express Scripts means it now earns more revenue from the pharmacy supply chain than from its health plans.
Three PBMs manage 80% of all prescription drug claims for 270 million Americans. Three wholesalers control 98% of U.S. drug distribution.
These are genuine conflicts of interest. When one entity controls who pays, who prescribes, and who dispenses, and profits from all three, the patient becomes the raw material in a financial engineering exercise.
The Glass-Steagall analogy is apt: you cannot have the same entity making the loan and rating the bond. You cannot have the same conglomerate setting the price and paying the claim.
So yes. The bill identifies a real structural disease.
And yet it treats only one organ system while ignoring the cancer that metastasized years ago.
Boston has 700,000 people and one ambulatory surgery center. If that fact surprises you, you’re not reading the right newsletter. Fix that. Subscribe.
What the Bill Ignores: The $275 Billion Systematic Advantage
Here is where the political economy of hypocrisy reveals itself.
I have spent the past ten years quantifying what I call The Systematic Advantage, the annual subsidy apparatus that flows exclusively to large health systems while independent physicians receive exactly zero. Our original 2025 estimate was $125 billion. Updated data from HRSA, MACPAC, the GAO, and Johns Hopkins has more than doubled that figure to over $275 billion annually.
