WINNING THE GAME OF MONOPOLY

So, faced with unlimited growth in demand for healthcare, we should have many different organizations that will be rushing to provide services, right? Nice theory.

In reality, our medical system has evolved with a set of rules that could have come straight from the board game Monopoly. If you were raised in America anytime over the last 100 years or so, you remember the game. The goal, of course, is to control as much real estate as possible, getting to the point where you utterly dominate the properties on the board. When no one else can compete, you win. This is the most popular board game in American history, and it’s quite likely you played hundreds of times. But let me ask you; how often did anyone actually “win?” Unless you were part of the most dedicated and cut throat of social groups, you probably just played until reaching a stalemate, with just two or three players dominating their particular regions of the board. Almost every player finds it impossible to progress beyond this stalemate, and thus the evening’s entertainment usually moves on to other events. Think about how that board usually looked by the time you packed up the game for the evening…..although you were in a stalemate with one or two other players, it was quite likely that each player dominated their particular zone on the board. You might also remember “Risk: the game of world conquest.” It would usually also bog down and end the same way; a limited number of players dominating certain zones on the board.

Perhaps these two games have retained such popularity over the years because real business outcomes are shockingly similar. Even though though the game was called “monopoly,” it really should have been called “OLIGOPOLY.” Derived from Ancient Greek (which shows you how old this concept is) a MONOPOLY is where only one player dominates a market. In the United States today, business monopolies are technically illegal, and rare. An OLIGOPOLY, on the other hand, is when just a few players dominate the game. These market scenarios are not just common, but seem to be almost encouraged under the law. Oligopolies are legal because, even though there are just a few players in the game, the three or four players in the market would theoretically compete with each other, benefiting the consumer. But remember how that board looked at the end of your Monopoly game? There were still a few players in the game, but in reality each player had a virtual monopoly on their geographic zone in the market. There is just enough competition so that lawmakers can sleep at night telling themselves that they preside over a competitive market, but in reality, competition is quite limited. Another, not so nice word for this market arrangement is “cartel.”

If you have ever received a thunderbolt in the mail in the form of a five figure hospital bill, you can thank the medical oligopoly for that. The bad new is that, after almost a decade of supposed health care reform, the hospital oligopolies of the United States are stronger than ever. The good news is that you don’t have to be the victim. You can own a piece of the action.