Mark Cuban has a new rallying cry in his campaign to fix American healthcare: "break up big medicine."
He's hardly alone. Sen. Elizabeth Warren, D-Mass., and Rep. Alexandria Ocasio-Cortez, D-N.Y., among others, are targeting vertically integrated healthcare giants as drivers of rising costs and declining competition.
They're right about one thing -- "big medicine" is real. But the healthcare giants they now condemn are, in large part, creatures of Obamacare. Democrats spent years designing policies that rewarded scale, consolidation, and vertical integration. Now they want Washington to clean up the mess those policies created.
More trustbusting from Washington is unlikely to restore competition in the healthcare market. If lawmakers want lower prices and more choice for consumers, they'll need to dismantle the Obamacare-era policies that encouraged consolidation in the first place.
Over the past decade, the nation's largest healthcare companies have grown into sprawling conglomerates through a wave of mergers and acquisitions.
UnitedHealth Group now owns Optum, one of the country's largest pharmacy benefit managers and employers of physicians. CVS owns both insurer Aetna and PBM giant Caremark. Elevance Health, formerly Anthem, has expanded aggressively into acquiring physician practices and delivering care.
These firms are no longer simply insurers. They operate across nearly every layer of the healthcare system.
The result has been less competition. In 91% of metropolitan areas, at least one insurer controls 30% or more of the commercial market. In nearly half of metro areas, a single insurer controls at least 50%.
Less competition means higher prices. Since 2014, benchmark premiums on Obamacare's exchanges have climbed roughly 75%, while deductibles have risen by nearly 55%. Between 2015 and 2025, the average annual premium for an employer-sponsored family plan increased more than $9,000, to just under $27,000.
Consolidation did not emerge in spite of Obamacare. In many ways, it emerged because of it.
Consider one of the law's most consequential insurance reforms: the medical loss ratio rule. Obamacare requires insurers to spend a fixed percentage of premium revenue on medical claims -- 85% in the large-group market and 80% in the individual and small-group market. The rule effectively caps insurers' profits.
Progressives sold the rule as a way to ensure that people got good value for their premium dollar. In practice, it encouraged insurers to grow.
If profits are capped as a percentage of premiums, insurers can boost earnings by increasing total premium revenue. One way to do that is by tolerating -- or even encouraging -- higher healthcare spending, since a larger premium base can yield larger absolute profits.
Another strategy is vertical integration. By acquiring PBMs, physician groups, and care-management companies, insurers can move revenue into affiliated businesses that sit outside Obamacare’s tighter profit restrictions.
UnitedHealth has reportedly paid its affiliated providers higher rates than competing independent practices -- effectively shifting premium dollars between businesses under the same corporate umbrella.
At the same time, Obamacare imposed a dense web of mandates, pricing rules, and compliance requirements that smaller insurers struggled to absorb. Large incumbents could spread those costs across a broader customer base and use their scale to expand into new markets.
The result was predictable: fewer competitors, more consolidation, and larger healthcare conglomerates.
Many Obamacare supporters explicitly welcomed this kind of consolidation.
In 2014, Ezekiel Emanuel, a health policy adviser in the Obama administration, predicted that the law would "lead to the end of insurance companies as we know them" by pushing them toward becoming "integrated delivery systems." Former Obama budget director Peter Orszag has similarly defended vertical integration in healthcare as economically beneficial.
A decade later, Democrats are looking to use antitrust policy to clean up the mess their own policies helped create. Patients should be skeptical.
Healthcare markets need more competition, lower barriers to entry, and fewer policies that reward size and consolidation. Those conditions cannot be engineered through another round of federal intervention.
If lawmakers want to reduce the power of "big medicine," they should start by repealing the Obamacare-era policies that made healthcare consolidation profitable -- and left patients with fewer choices and higher costs.
Empowering patients rather than the government is the way to reduce healthcare costs and provide better care for everyone.
Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is The World's Medicine Chest: How America Achieved Pharmaceutical Supremacy -- and How to Keep It (Encounter 2025). Follow her on X @sallypipes.