The American Medical Association (AMA) and several consumer groups are calling upon New York regulators to reject the proposed $53 billion merger of Anthem and Cigna, two of America's leading insurers. The issue was raised at the recent New York Department of Financial Services hearings.
To be sure, this is not the first time that major insurance companies have proposed and/or succeeded in making such reductions in competition, with Aetna and Humana being the most noteworthy recent development, made controversial by the revelation of information by Aetna suggesting a retrenchment from the Affordable Care Act marketplaces in the event that the merger should be blocked. (Aetna recently withdrew from 11 of the 15 states in which it was in an ACA market).
And further, this issue is hardly unique to the American healthcare system. Over the years, we have seen reductions in the number of cable companies (hence the number of people for whom the word "Comcast" induces panic and/or rage), airline companies (replace "Comcast" with "United Airlines"), telephone companies, and the like. Perhaps it is not surprising that antitrust has been a dominant subject on the Supreme Court's agenda under John Roberts.
What is unique to the American healthcare system is the deeply personal nature of the effects of mergers, which generally tend to reduce competition and thus drive up prices (potentially driving down quality of care given the reduction in the number of competitors). When we have to take a different airline because it garners us better savings (though probably not better than a few years ago), we might utter an expletive, shrug our shoulders, and click "complete purchase." When we have only one cable company in a given region, we do the same thing, because we and they know, our stubbornness rarely is such that we will forego cable and internet (most of all, internet). Most of us can begrudgingly deal with the extra $30 in our cable/internet package (in that terrain, we're often a captive audience without a viable alternative), or shop around for travel discounts. But in the terrain of healthcare, it can be literally life and death.
The real-world consequence of cable mergers is a reduction in consumer choice, potentially slower service, and a modest markup in the price of services we might have already had in the first place. The real-world consequence of health insurance mergers is that people cannot obtain reasonable healthcare plans, thus interfering with the ability to obtain needed services, whether preventive care or interventions in serious medical problems that might bankrupt a lower-income family if their income level doesn't quite meet criteria for Medicaid but that doesn't allow for the purchasing of a lower-deductible plan. (As in all cases including healthcare, the middle class often gets squeezed the worst).
At the New York Department of Financial Services hearing, Dr. Malcolm Reid, the president of the Medical Society of the State of New York, said, "If Anthem gets its way, it will have even less incentive than it does now to take care of people, and the merger would ultimately compromise the ability of physicians to advocate for their patients... In practice, market power allows big insurers to exercise control over clinical decisions, which undermines the patient-physician relationship and eliminates key safeguards of patient care," and went on to note that the lack of insurer competition has negatively impacted patients as well as physicians, who are left often to join larger networks rather than struggle to negotiate reimbursement rates with the insurance giants that are spawned by way of consolidation.
When we place physicians in a weaker position relative to the companies helping to cover the cost of their patients' care, the quality of care inevitably gets undermined. Reimbursement rates are more difficult to negotiate. Claims denials become more difficult to appeal, and there are fewer alternative insurers to which to turn. When we place patients in the position of having even fewer options from which to choose health insurers, they are potentially less likely to be able to obtain a plan that best suits their or their family's needs. Indeed, the AMA's antitrust attorney Henry Allen held that "[t]he diminished competition leading to higher prices will also lead to lower plan quality."
Competition is essential in general, and all the more so when discussing the human issue of American healthcare, which too often is reduced to the less-than-human business models. We do not have the votes in Congress for a single-payer program, and the mixed response to the Affordable Care Act does not suggest that we are anywhere close to deleting the words "over 65" from Medicare. But if we do not reduce the role that corporate anti-competitive practices play in providing essential medical services to the American public, too many (and not just the poor) will suffer the consequences.
To be sure, this is not the first time that major insurance companies have proposed and/or succeeded in making such reductions in competition, with Aetna and Humana being the most noteworthy recent development, made controversial by the revelation of information by Aetna suggesting a retrenchment from the Affordable Care Act marketplaces in the event that the merger should be blocked. (Aetna recently withdrew from 11 of the 15 states in which it was in an ACA market).
And further, this issue is hardly unique to the American healthcare system. Over the years, we have seen reductions in the number of cable companies (hence the number of people for whom the word "Comcast" induces panic and/or rage), airline companies (replace "Comcast" with "United Airlines"), telephone companies, and the like. Perhaps it is not surprising that antitrust has been a dominant subject on the Supreme Court's agenda under John Roberts.
What is unique to the American healthcare system is the deeply personal nature of the effects of mergers, which generally tend to reduce competition and thus drive up prices (potentially driving down quality of care given the reduction in the number of competitors). When we have to take a different airline because it garners us better savings (though probably not better than a few years ago), we might utter an expletive, shrug our shoulders, and click "complete purchase." When we have only one cable company in a given region, we do the same thing, because we and they know, our stubbornness rarely is such that we will forego cable and internet (most of all, internet). Most of us can begrudgingly deal with the extra $30 in our cable/internet package (in that terrain, we're often a captive audience without a viable alternative), or shop around for travel discounts. But in the terrain of healthcare, it can be literally life and death.
The real-world consequence of cable mergers is a reduction in consumer choice, potentially slower service, and a modest markup in the price of services we might have already had in the first place. The real-world consequence of health insurance mergers is that people cannot obtain reasonable healthcare plans, thus interfering with the ability to obtain needed services, whether preventive care or interventions in serious medical problems that might bankrupt a lower-income family if their income level doesn't quite meet criteria for Medicaid but that doesn't allow for the purchasing of a lower-deductible plan. (As in all cases including healthcare, the middle class often gets squeezed the worst).
At the New York Department of Financial Services hearing, Dr. Malcolm Reid, the president of the Medical Society of the State of New York, said, "If Anthem gets its way, it will have even less incentive than it does now to take care of people, and the merger would ultimately compromise the ability of physicians to advocate for their patients... In practice, market power allows big insurers to exercise control over clinical decisions, which undermines the patient-physician relationship and eliminates key safeguards of patient care," and went on to note that the lack of insurer competition has negatively impacted patients as well as physicians, who are left often to join larger networks rather than struggle to negotiate reimbursement rates with the insurance giants that are spawned by way of consolidation.
When we place physicians in a weaker position relative to the companies helping to cover the cost of their patients' care, the quality of care inevitably gets undermined. Reimbursement rates are more difficult to negotiate. Claims denials become more difficult to appeal, and there are fewer alternative insurers to which to turn. When we place patients in the position of having even fewer options from which to choose health insurers, they are potentially less likely to be able to obtain a plan that best suits their or their family's needs. Indeed, the AMA's antitrust attorney Henry Allen held that "[t]he diminished competition leading to higher prices will also lead to lower plan quality."
Competition is essential in general, and all the more so when discussing the human issue of American healthcare, which too often is reduced to the less-than-human business models. We do not have the votes in Congress for a single-payer program, and the mixed response to the Affordable Care Act does not suggest that we are anywhere close to deleting the words "over 65" from Medicare. But if we do not reduce the role that corporate anti-competitive practices play in providing essential medical services to the American public, too many (and not just the poor) will suffer the consequences.
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