MEGA-MERGERS: Are Patients Falling Victim?
NPR's Frank Browning reported yesterday that the present trend in mergers is not simply larger companies buying up smaller ones, but "health insurance mammoths, like Aetna, swallowing up elephants, like Prudential." The result "as enrollment consolidates into these very large national companies [is] that consumers, and employers for that matter, have a choice of fewer and fewer plans," says Larry Levitt, an economist with the Kaiser Family Foundation. Indeed, while the insurance industry panned the ill-fated Clinton health care plan in 1994 for allowing too little choice, Browning points out that currently, 60% of Americans insured through their employers have no choice at all as to which health plan they may choose, and another 20% may only choose among two plans. Princeton economist Uwe Reinhardt said if the Aetna/Prudential merger goes through, the conglomerate would control about one-third of the New York health care market, effectively eliminating "any real competition." He said, "If these plans keep buying each other up, that's no longer competition, because the executives of those plans can pretty much regulate everything they want in one golf game." He added that should the trend continue, doctors and hospitals may further coalesce into bargaining cooperatives, leaving the health economy dominated by "two huge blocs, providers and payers." In such a situation, the consumer would be sent a "stiff bill" and it would not be long before the government converted health care "into a regulated utility."
The segment notes that the most successful HMOs -- those like Aetna with the financial strength to acquire others -- often arrive at their success by raising premiums and severely limiting patient care. Higher premiums cause some consumers to choose to go without health coverage, as evidenced by the pool of uninsured that is growing by one million people a year. In turn, as fewer people are insured, fewer get the benefit of preventive care and "when they do get sick, it costs more," leaving those who are insured to pick up the bill, reports Browning. He concludes: "Two things are sure: The cost of care will continue to rise, and individual consumers will carry a bigger share of the burden" ("Morning Edition," 3/1). See story No. 11 for coverage of today's segment, which looks at the future of employer-based health insurance.