The payer merger effect: What it means
Many physicians fear what consolidation among four of the big five national payers will mean for their practices.
Their worries are many: Will insurers drop them from increasingly narrow networks? Will their practices face new in-network competition? What leverage will they have in contract negotiations when so few insurance companies could end up controlling the marketplace? Will there be logistical hassles in getting integrated into the new networks?
The apprehension stems from two deals that are under review by the U.S. Department of Justice’s anti-trust division and that were the subject of hearings before the House and Senate Judiciary Committees in September. In one of the proposed mergers Anthem, the country’s largest Blue Cross Blue Shield affiliate, would buy Cigna for $54.2 billion. Anthem says the purchase is intended to strengthen its position in the commercial market.
The other deal, announced in July, is for Aetna to acquire Humana for $37 billion. The consolidation, aimed at enhancing Aetna’s position in the Medicare Advantage market, would create the second-largest managed care company in the United States. Shareholders from both insurers approved the deal in an October vote.
The mergers have prompted vigorous protests from the medical community. The American Medical Association and American Hospital Association have lobbied against them, arguing that they would let just a few companies control most of the healthcare insurance market. Many experts say the concerns are well-founded. The proposed mergers, they say, would add to the pressures that already make it difficult for independent primary care practices to stay afloat.