Health Insurance Mergers: Increased Profit, Not Better Care

By Joseph Valenti, MD, FACOG
Past Chair, Council on Socioeconomics, Texas Medical Association

Think back to your last airline flight. After paying a premium price for your ticket you probably waited in a long check-in line, paid hefty baggage fees, dealt with delays—and spent hours in a cramped, narrow seat. (I assume, like most of us, you fly in economy.) Commercial flying has become increasingly miserable in recent years. But as travelers, most of us feel pretty powerless; if we want to fly, we have no choice but to take what the airlines are offering.

We can trace the unpleasant state of airline travel to one overriding cause: industry consolidation. In the past 12 years, 10 major U.S. airlines have merged into four mega-carriers—and they have all the power.

In healthcare, we’re seeing the same merger forces at play — only with much higher stakes.

As our nation’s insurance companies continue to gobble each other up, they’re intentionally crushing patients with higher premium prices, increased out-of-pocket costs, reduced benefits for essential services, narrower networks, and longer delays for shorter appointments. Two proposed new mega-mergers would set the stage for an increasingly dismal future for American healthcare.

Higher Prices, Fewer Choices
As a practicing physician and the outgoing Chair of the Texas Medical Association’s Council on Socioeconomics, I’ve seen firsthand the decline in patient care as insurance company giants join forces. These companies constantly promise that consumers will reap the benefits of mergers in the form of lower costs and more efficiency, but this has proven patently false. In reality, these mergers lead to higher premiums for individuals, families, and employers, and lower payments to physicians.

Aetna is looking to buy Humana; and Anthem wants to acquire Cigna. These companies currently provide coverage for nearly 90 million people — a whopping 28 percent of the American public.

Should the proposed mergers be approved, the nation’s five largest insurance companies would become only three: Aetna, Anthem, and United Healthcare. A study by the American Medical Association found that this consolidation would reduce competition in up to 154 metropolitan areas across 23 states — leaving these companies in violation of federal antitrust guidelines.

Forcing giant insurers to divest a few plans in select areas as a condition for merger will not benefit patients or society.  With history as our guide, the divested plans will be gobbled up by another giant for-profit competitor or the market will be left to Blue Cross Blue Shield, leaving consumers with even less choice.

Why Physicians Are Opposing These Mergers
As physicians, our goal is to provide personalized care and give our patients the time and consideration they deserve. But the larger these companies become, the more they make this goal impossible.

Essentially, health insurance companies select the doctors in their networks based on the cost of the care that was ordered for their patients. Cost—not quality of care, not outcomes, not patient wellbeing or satisfaction— becomes the most important factor. Big insurance is pressuring physicians to use lower cost services and treatments, to spend less time with our patients, and even to stop treating patients who require more expensive treatments.

Payments also continue to shrink, and the less physicians are paid per patient, the more patients we have to see to stay afloat. What should be an hour-long visit turns into 15 minutes.

And when we try to negotiate our rates or advocate for our patients, we’re told to “take it or leave it.” Physicians who refuse to drop expensive patients or bow to insurance company demands are forced out of networks, and this directly affects quality of care for patients covered by these insurers. Patients need to know that only 8.5 cents of every dollar they spend on healthcare actually goes to their physicians.

Given these factors, some physicians would rather close their doors than be forced to provide substandard care — and many have.

By continuing to squeeze clinicians, insurance companies are also discouraging some of the brightest people in the world from going into medicine. And with a nationwide shortage of healthcare professionals, we need good physicians more than ever.

What Patients, Consumers, and Doctors Can Do
The U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) are currently reviewing these prospective mergers. Insurance officials in Missouri issued a preliminary order against the merger of Aetna and Humana, citing its anti-competitive nature. Many other organizations—including the American Medical Association, the American Hospital Association, the Texas Medical Association, and more—have spoken out against the plans for consolidation.

Patients have the greatest power to speak out about this issue and they need to make their voices heard. Patient advocacy groups should organize town hall meetings and invite insurance representatives, then ask them tough questions. How much does your CEO make? How much do you have in reserve? Advocates should start a social media campaign uniting patients against the mergers. Individuals need to contact the DOJ and FTC directly and express their opposition.

Make no mistake, the insurance companies are intentionally creating an environment that negates patient-centric care and punishes physicians for attempting to provide it. They’re lying to consumers, forcing the hands of physicians, and creating a new-normal environment of substandard care — all in the interest of profit.  They’ve gotten too big and in the process are failing us.  Breaking up these mega insurers into smaller companies may be the only way to enable choice and negotiating power.

To avoid more of these disastrous mergers and create a more consumer/patient-centered system, we need more healthcare professionals engaged in policymaking. We need physicians, nurses, and other clinicians as congressional representatives, senators and key decision-makers. Healthcare is arguably the most important issue facing our country: we need the right people in power to ensure the wellbeing of patients and physicians as our rapidly aging population moves forward into the future.

Your Turn

  • What changes do you expect to see in your costs and care with fewer, bigger health insurance companies?
  • What do you think about your physician receiving 8.5 cents from every $1.00 you spend on health care?
  • What will you do to voice your concerns about health insurance industry consolidation?

Joseph Valenti, MD, FACOG, is the immediate past Chair of the Council on Socioeconomics at the Texas Medical Association. He is a current Board member of the Physicians Foundation, where he chairs the Governance Committee. A Board-Certified Gynecologist with 18 years experience, he is the founding and senior member of the medical practice Caring for Women, PA, with offices in Denton, Flower Mound, and Frisco, TX. He is a DaVinci minimally invasive gynecologic surgeon and national proctor for over 10 years. Dr. Valenti is an expert in Women’s Health and has an extensive background in organized medicine, health care policy and research, medical staff and hospital governance, insurance industry relations, and private practice consulting.

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