From the
PRESIDENT
ROBERT “BOB” H. COUCH, MD, MBA
GLMS President | [email protected]
MERGERS, MONOPOLIES AND MONOPSONIES
M
uch has been written about the proposed Aetna-Humana merger. It’s
certainly been a top local story, with
thousands of Humana employees impacted by the deal. As physicians, we need to
consider the implications of the $35 billion
acquisition of Humana by Aetna and the $48
billion acquisition of Cigna by Anthem for
our patients.
Mergers and acquisitions have heralded
changes in the health insurance industry
during the last 20 years. These mergers have
significantly reduced the number of insurers
and concentrated their market share advantage in a number of metropolitan areas. Why
should we as physicians care?
The risk we and our patients face is that
insurance company monopolies may develop.
A few companies with large market share can
control prices they charge for health insurance simply by eliminating competition. With
only a limited number of insurance sellers,
patients have fewer choices in selecting a
health insurance product. The Affordable
Care Act has worsened this trend. By setting
a minimum standard for plans that must all
include certain ACA mandated features, insurance buyers must often pay for features
they do not require. These essential health
benefits, such as maternity care or mental
health services, are not really essential for
everyone, but by increasing the size of the
risk pool, the cost can be spread out over
more covered persons. Unfortunately, if you
didn’t need the essential service in the first
place, you are still paying more for something
that you didn’t need. By mandating certain
standards, the ACA has worked to reduce
competition.
Competition in health care is a good thing.
From car manufacturers to hotel chains, competition ensures that we can get good value
for the money, or that we “get what we pay
for.” When compe ][ۈ\