Health insurance mergers may impede value-based care

health insurance mergers industry care

The Justice Department determined that if large insurers come together it would hinder new coverage model adoption.

Health insurance mergers have been increasingly common lately. That said, they’ve also been generating a considerable amount of controversy at the same time. According to the U.S. Justice Department, if very large insurers should merge as they have been doing, it could be damaging to current industry model trends.

Among the main changes in health care is the move away from fee-for-service medicine.

Instead, private insurance and the government have been shifting toward payments based on health outcomes and quality. However, with a large number of health insurance mergers among the leading companies in the country, this trend could be hindered. This, according to the U.S. Justice Department. They stated that if large health insurance companies are to be permitted to
merge, it would hinder the transition toward value-based care.

Some of the largest proposed health insurance mergers include Aetna, Humana, Anthem and Cigna.

health insurance mergers industry careThe U.S. Justice Department has made this determination in lawsuits designed to block Aetna from being able to buy Humana, and in those to stop Cigna from being acquired by Anthem. Value-based health care models are in direct opposition to the traditional model based on fees per service. Conversely, fee-per-service models place a focus on volume of health care delivery. The outcome is a rash of unnecessary testing and procedures which can become exceptionally expensive. Moreover, over-treatment of patients can place their wellbeing at risk.

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Random Quotes to Remember ~ “The best investment is in the tools of one’s own trade.” – Benjamin Franklin

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According to the U.S. government attorneys in the lawsuit they have filed against Anthem and Cigna, “The proposed merger will eliminate this competition between Anthem and Cigna and likely lead to lower reimbursement rates, less access to medical care, reduced quality and fewer value-based provider collaborations.”

Moreover, within the health insurance mergers lawsuit, government antitrust attorneys added that “Cigna has been particularly focused on investing time and resources in value-based arrangements as a way to gain share against Anthem and other larger competitors.” They also added that the internal plans at Cigna demonstrated an ongoing aggressive development of provider collaborations. That said, if the proposed merger were to go forward, the lawsuit expressed that Cigna would no longer stand as a rival to Anthem and would therefore reduce the competition incentives between them.

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