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AHA: Anthem-Cigna merger would hurt move to value-based reimbursement


The American Hospital Association (AHA) is urging a federal appeals court to uphold a district court decision that has blocked Anthem’s proposed $54 billion acquisition of Cigna.

The organization asserted that the combined company would reduce innovation in the health-insurance market when it’s most needed to continue shifting healthcare away from the fee-for-service model toward value-based care.

“Anthem has been less willing than Cigna to innovate and develop value-based reimbursement systems,” the AHA wrote.

Anthem has said that it is “committed to completing this value-creating merger either through a successful appeal or through settlement with the new leadership at the Department of Justice.”

However, the AHA contended that value-based reimbursement models “depend critically on the willingness of payers to experiment, innovate, and collaborate with hospitals and physicians to develop new payment methodologies that go beyond the old fee-for-service system.” And there is “substantial evidence that underscores Cigna’s particular reliance {as opposed to Anthem’s} ‘upon innovation to compete,’” the AHA added.

AHA’s brief comes days after the Department of Justice, several states and the District of Columbia also urged the appeals court to maintain the lower court’s blocking of the agreement. There is “overwhelming evidence – uncontested by Anthem on appeal” that the merger would raise prices to consumers and shrink innovation among insurers, and that “showed Anthem had no real plan to achieve” the medical-cost savings it asserted that the combined company would create.

To read the AHA’s argument please hit this link.



AMA study whomps insurance mergers


The American Medical Association is very worried that insurance-industry consolidation may give the remaining insurers enough bargaining power to drive down the compensation of physicians, whose pay remains the highest of physicians in the world.

So the AMA has come out with its newly updated market analyses of the effect of big insurance mergers.

“The AMA analyses show that Anthem-Cigna and Aetna-Humana mergers would significantly compromise market competition in the health insurance industry and threaten healthcare access, quality and affordability,” AMA President Andrew W. Gurman, M.D., said.  “With existing competition in health insurance markets already at alarmingly low levels, federal and state antitrust officials have powerful reasons to block harmful mergers and foster a more competitive marketplace that will operate in patients’ best interests.”

The study, as reported by Becker’s Hospital Review, found, in Becker’s words:

1. “Seventy-one percent of the health insurance markets for 388 metropolitan areas were highly concentrated, largely the result of consolidation.

2. “In nearly all (91 percent) of the 388 metropolitan areas, at least one insurer had a commercial market share of 30 percent or greater, the study found.

3. “According to the study, a single insurer’s commercial market share was at least 50 percent in 40 percent of the 388 metropolitan areas.

4. “The study also found 14 states had a single health insurer with at least a 50 percent share of the commercial health insurance market. Those states are Alabama, Delaware, Hawaii, Illinois, Indiana, Louisiana, Michigan, Nebraska, North Carolina, North Dakota, Rhode Island, South Carolina, Vermont and Wyoming.”

To read the Becker’s article on this, please hit this link.


AHA meeting denounces insurer-merger plans


It’s no surprise that hospitals don’t like health-insurer  mergers, as the American Hospital Association annual meeting on May 2 made clear.

They particularly don’t like  the two  biggest pending health insurer mergers — Aetna-Humana and Anthem-Cigna.

“The unprecedented level of consolidation that these deals threaten could make health insurance more expensive and less accessible to consumers,” moderator and AHA board member Thomas Miller said. “We are also very concerned that these deals could hinder the momentum that hospitals have established to move the nation’s healthcare system forward.”

The hospitals, of course, fear that the bargaining power of these behemoth insurers could slash their operating margins.

FierceHealthPayer reports that “Northwestern University Prof. Leemore Dafny has argued that, because while there is no definitive academic research proving that past insurer mergers have created cost efficiencies or improved quality and innovation, there is evidence that provider reimbursement decreases and that insurance premiums go up.”

“The data is also clear, she said, that the health-insurance sector is already composed of “highly concentrated markets that have grown more concentrated over time.”

At the same, federal and state  regulators have been eying skeptically various big hospital- system mergers as threatening higher prices in their markets.

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