Providers fear consequences of health insurance industry consolidation

As merger rumors intensify between the country's largest health insurers, healthcare providers worry that increased consolidation will spell bad news for them.

News broke earlier this week that Anthem has made bids to take over Cigna, followed swiftly by reports that UnitedHealth Group had moved to acquire Aetna. Humana is also ripe for acquisition due to its large share of Medicare Advantage customers.

But healthcare providers fear that the emergence of a handful of mega-insurers will give health plans even greater control of payments, provider networks and contracts, Forbes reports. Any deal would face considerable scrutiny from the government, intervention that the American Hospital Association (AHA) seems to welcome.

"We expect the Department of Justice's antitrust division to scrutinize every deal," Melinda Hatton, AHA's general counsel and senior vice president, said in a statement to Forbes.

The American Association of Family Physicians also expressed its concerns in a letter this month to the Federal Trade Commission (FTC), warning that major insurer mergers would "limit choices for consumers and decrease competition within the health insurance industry."

Yet hospitals and health systems are no strangers to increased consolidation--nor to federal regulators' efforts to thwart it. The FTC's recent strategy has been to allow deals to be completed before analyzing--and in some cases unwinding--mergers that have anticompetitive effects.

Still, at least one state official has joined healthcare providers in their concern about the consequences of major insurance company mergers.

"Generally speaking, further consolidation in the health insurance industry is not a good thing for consumers, employers or medical providers," Dave Jones, California's insurance commissioner, told the L.A. Times. Large, powerful organizations are also less likely to be transparent with their price and quality data, David Lansky, chief executive of the San Francisco-based Pacific Business Group on Health, told the newspaper.

To learn more:
- read the Forbes article
- here's the L.A. Times report