Health insurance consolidation threatens consumers and health care, the AHA warns
Sep 22, 2015
The “unprecedented” consolidation that would result from recently announced health insurance company acquisitions threatens consumers and the nation’s health care system, AHA President and CEO Rick Pollack Sept. 22 told a Senate Judiciary Committee panel.
Pollack warned lawmakers about the potential harm that could occur from the July announcements that Aetna intends to buy Humana and Anthem plans to buy Cigna – deals that would bring the number of publicly-traded health insurance giants from five to three. The deals would mean that these three insurers would cover more than 131 million people, about two out of every five Americans with health insurance.
“This unprecedented consolidation should be of extreme concern for millions of health care consumers – as well as hospitals, doctors and others – who are working to improve quality and efficiency while making care more affordable to patients,” Pollack said in his testimony before the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights. “For consumers, these deals could make health care more expensive and less accessible. This applies to insurance purchased in the commercial market … as well as Medicare Advantage plans.”
Pollack testified twice within 10 days before congressional subcommittees on the proposed acquisitions. On Sept. 10, he urged closer scrutiny of the insurer deals in testimony before a House Judiciary Committee panel, and he did so again at this week’s hearing.
“We are very concerned that both these deals could result in fewer choices for consumers – narrower networks of providers in what few choices remain – and higher premiums and out-of-pocket costs,” Pollack told the Senate panel. “That’s why both of these acquisitions merit the closest scrutiny from the Department of Justice’s [DoJ] Antitrust Division and Congress.”
He added that DoJ “should be ready to challenge the insurance deals, if it finds that these transactions threaten the vitality of our health care system and the health and welfare of consumers across the nation.”
As in his previous testimony on Capitol Hill, Pollack drew a sharp distinction between the realignment taking place in the hospital and health system field and the consolidation proposed in the health insurance industry.
He said hospitals and health systems are realigning so patients have convenient access to care. They are coordinating with caregivers to deliver care that is more patient centered and teaming up with other providers to unify patient information, coordinate transitions and follow-up care, he told the subcommittee.
The most common benefits of hospital realignment are “improved coordination across the care continuum, increased operational efficiencies, greater access to cash and capital for smaller or financially distressed hospitals, and support for innovation, including payment alternatives that entail financial risk,” Pollack observed in his prepared testimony. “For financially struggling hospitals, finding a partner can make all the difference.”
He said the health insurance deals could impede hospitals’ progress toward achieving better health and health care at lower cost.
“There is no reason to believe that allowing these insurers to become even larger – and more immune from competitive forces – would change their incentive to sit mostly on the sidelines and reap the considerable financial rewards for providers’ innovation,” he told the Senate panel.
For more on Pollack’s testimony, visit www.aha.org/testimony, and find more coverage at http://blog.aha.org.
Topic: Advocacy and Public Policy
Tags: consolidation, mergers, antitrust