As talk of merger-mania hits the health insurance industry, doctors and hospitals worry about potential market clout of these companies if the so-called “Big 5” publicly-traded insurers dwindle to four or even three.
In the past month, there have been several reports
While it’s uncertain how health insurance industry consolidation will shake out in the coming weeks or days, doctors and hospitals fear larger health plans with greater control of provider networks and contracts could squeeze payments, and potentially, lead to anticompetitive behavior.
Provider groups are so anxious about what’s ahead they are already urging regulators to scrutinize any proposed consolidation.
“We expect the Department of Justice’s antitrust division to scrutinize every deal,” Melinda Hatton, general counsel and senior vice president of the American Hospital Association said in a statement. “We believe that consolidation of large commercial insurers is the root of higher prices for consumers. We would expect the antitrust division to ensure that none of these new consolidations would add to that problem.”
Already, providers of medical care have a major antitrust lawsuit against Blue Cross and Blue Shield plans that has been consolidated into a class action wending its way through a federal court in Alabama. The suit accuses the Blues plans, including Anthem, of conspiring to fix what they pay doctors and other medical-care providers across the country. The Blues plans have denied the allegations.
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Health plans say any consolidation among health insurers is needed as trends driven in part by the Affordable Care Act demand they keep administrative costs in check. The health law and moves toward value-based care also tend to require large populations of patients to spread risk, making sure premium dollars cover the expenses of their sick enrollees and improve health outcomes.
But providers say in a growing number of markets across the country, there are increasingly fewer choices for doctors and patients when it comes to health insurers.
The American Medical Association said in a report last fall that a single health insurer already has at least 50 percent share of the commercial health insurance market in two out of every five metropolitan areas of the U.S.
“Competition in the health insurance industry has been consistently eroding with more markets across the country dominated by one or two insurers,” AMA president Dr. Steven Stack said, citing the AMA’s annual analysis. “Seventeen states have a single health insurer with a commercial market share of 50 percent or more. The dominant market power of big health insurers increases the risk of anti-competitive behavior that harms patients as health insurers substitute corporate policy over good clinical decisions.”
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