This post was contributed by Joseph Valenti, MD, FACOG, Board Member of the Physicians Foundation.
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 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 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.
Pending the verdict of the Department of Justice’s trial in December and the proposed mergers move forward, 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 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.
The Physicians Foundation is committed to providing doctors with a voice, and ensuring that the public remains informed, despite the increasingly repressive climate of the medical insurance industry. To achieve this initiative the Foundation funds research, such as the 2016 Patient Survey and the Biennial Physician Survey, giving an outlet for physicians and patients to express the frustration and pressures they face. These surveys reveal an increasing portion of the patient population is burdened by medical debt (40 percent), as well as a majority of physicians feeling overextended, and contemplating reducing patients or closing practice (81 percent).
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) has sued to block these two mergers, citing its anti-competitive nature. U.S. Attorney General Loretta E. Lynch said, “These mergers may increase the profits of Aetna and Anthem. But they would do so at the expense of consumers, employers and health professionals across the country, inflicting costs that cannot be measured in dollars alone.” Missouri insurance officials have additionally issued a preliminary hearing against the merger, and many other organizations—including the American Medical Association, the American Hospital Association, and the Texas Medical Association—have spoken out against the plans for consolidation.
Patients have the greatest power to voice concern regarding this issue, and they need to make their opinions 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.
A version of this post was originally featured on Care For Your Mind Blog: Health Insurance Mergers: Increased Profit, Not Better Care
