On Dec. 3, CVS Health, a popular drugstore chain and pharmacy benefits management giant, announced that it will be acquiring one of the largest health insurers, Aetna, in a deal valued at around $69 billion.
While Aetna and CVS executives and many in the bourgeois press claim that this mega-acquisition will lower costs for consumers and working people, history has shown us something completely different. This isn’t the first time a company like CVS and a large health insurer have merged.
In 2007, UnitedHealth Group and CatamaranRx merged with similar promises of reshaping health care and increasing savings for consumers, none of which we have seen. Similarly, WellPoint and Woodland-Hills health insurers merged in 2004, stating that the merging of computer systems and consumer data would create savings and benefit customers. But 13 years later it seems like those savings were only meant for their executives, as WellPoint chairman Leonard Schaeffer was set to make $37 million from the deal itself and $45 million from pension rights.
Monopoly capitalism: How does it affect our lives?
Today’s form of capitalism is often called the monopoly stage of capitalism, because of the increasing tendency of capital to concentrate into large, centrally coordinated firms that are on the lookout to consolidate, push competition out, and dominate entire sectors.
A consequence of this concentration is that economic activities such as production, distribution, and price regulation are increasingly centrally organized, in contrast to capitalism in its competitive stage, where no companies were large enough to coordinate on the scale of whole industries.
And, of course, since the owners of these monopolies have profit on their minds, instead of using centralization to make the lives of working-class people easier it becomes another source of social and economic control.
CVS, for example, is set to acquire an enormous amount of health data from Aetna, and will likely use that to regulate its prices better in order to churn out even more profit than it does already.
This is one of the reasons why the prospect of the repeal of net neutrality is so scary. Internet service and cellular providers are constantly rumored to be acquiring each other (T-Mobile and Sprint, AT&T and Time Warner and so on), and many large ISPs have merged over the past decade. Imagine having just one Internet service provider that is hell bent on increasing profits having total control over all Internet users.
In a 1998 essay on the privatization of telecommunications, Nicholas Baran predicted that it would take 20-30 years to lay down fiber-optic cable at the local level to cover most of the United States and would cost around $200-400 billion. He noted, however, that a more likely scenario was that telecom monopolies would stand pat with the less advanced coaxial cable being used instead of making expensive investments in fiber-optics that would benefit consumers. As of 2016, even though the price to implement fiber-optic communication had dramatically fallen, the U.S. had only 9.4 percent fiber-optic coverage while people in the U.S. have been taxed $400 billion for fiber-optic Internet cable that doesn’t exist
This is the reality of monopoly capitalism.
The owners of CVS have no allegiance to everyday people and have no motivation to make health care cheaper or the process of acquiring it less daunting. In the short term, it may be economical to reduce prices in order to push out competitors and grab a larger market share, but ultimately, the benefits won’t last and prices will increase.
Democrat response
While some “left” Democrats like Bernie Sanders and Elizabeth Warren have voiced concern over the merger, they fail to address the root of the problem. The tendency towards monopolization is not something that can be changed with policy but is a natural outgrowth of capitalist productive relations. Executives are constantly guarding against dips in profit. This often comes in the form of investments in technology to increase productive capacity and efficiency.
When competing capitalists in the same sector can’t keep up with these investments and productivity, they’re either pushed out or bought out. In the case of cross-sector mergers and acquisitions, firms that already dominate a given sector have incentive to move capital into less saturated and more profitable sectors to grab a larger market share. Already earlier this year, Amazon acquired Whole Foods, and both Amazon and Wal-Mart have stated an interest in getting into the pharmaceutical industry.
The Democrats aren’t interested in making fundamental change and prioritizing the needs of everyday people over wealthy executives. As Nancy Pelosi, the Democratic minority leader in the House of Representatives, said, “We’re capitalists, and that’s just the way it is.” The calls to “break up the big guys,” while obscuring the cause of why these firms got so big and dominant in the first place, are getting old.
A socialist future
As evidenced by the Aetna-CVS merger, more and more wealth is being concentrated in fewer and fewer hands, and working-class people are left with no material gain, just the claim that at some point down the line the benefits will trickle down.
As the crisis of U.S. capitalism deepens, it is vital that we chart a path independent of the Democrats and Republicans and strive to build a society that is organized to meet people’s needs first and foremost. History has already shown us the potential health benefits of building such a system. We look no further than Cuba, a country that has one doctor for around every 150 citizens.
Cuba has made incredible strides and investments in biotechnology, high-tech drugs and anti-cancer and anti-tumor drugs, prioritizes preventative care over diagnostic care, and sends nearly a quarter of their medical professionals overseas to aid other oppressed countries. Even more impressive is that they have been able to accomplish this while their economic development is still being severely hindered by the U.S. blockade. The United States can easily allocate the wealth that working-class people themselves have produced towards health care for all, but we won’t get it unless we fight for it and struggle against a system that simply does not prioritize it.
