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Doctors and Plans Blame Each Other for Costs

John Commins, for HealthLeaders Media, November 29, 2012

Pauly says the best solution would be to break up the monopolies, but that probably isn't going to happen. "The next solution, which is probably where we are more likely to go, is to control or regulate the monopoly," he says. "The rules in the Affordable Care Act about minimum medical loss ratios are an attempt to get insurer profits and excess profits down by regulation. Medicare is big enough that it can push doctors and hospitals around, and the hope is that these new health insurance exchanges will somehow convert a whole bunch of insurance midgets into a giant that will somehow be able to deal more effectively with healthcare providers."

The AMA study found:

  • A significant absence of health insurer competition in 70% of the metropolitan areas it studied. These markets are rated "highly concentrated," based on the 2010 Horizontal Merger Guidelines issued by the U.S. Department of Justice and Federal Trade Commission.
  • In 67% of the metropolitan areas studied, at least one health insurer had an HMO market share of 50% or greater.
  • In 68% of the metropolitan areas, at least one health insurer had a PPO market share of 50% or greater.
  • In 68% of the metropolitan areas, at least one health insurer had a POS market share of 50% or greater.
  • The top 10 states with the least competitive commercial health insurance markets are (in order):  Alabama, Hawaii, Michigan, Delaware Alaska, North Dakota, South Carolina, Rhode Island, Wyoming, and Nebraska.
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3 comments on "Doctors and Plans Blame Each Other for Costs"


JosiePatrick (11/29/2012 at 3:20 PM)
Let me get this straight. Dr. cannot make enough money unless they form larger and larger provider groups and reduce duplication and overhead. And insurers don't want to enter markets because they can't make enough money. Single payer would get rid of both these concerns and get costs under control. Do healthcare consumers really want to pay for either the inefficiencies of competition or the overpricing of monopolies? It's time for insurers to rethink their business model. Time for employers to get out of the healthcare business. And time for providers to carefully consider what their career expectations are.

kerry willis (11/29/2012 at 2:46 PM)
40% of the healthcare dollar is spent on administration...How come the insurance companies only want to "save" on the 60% of healthcare spending that provides jobs and bonuses to administrators...what a joke Additionally the biggest area of spending on physicians that is increasing is with Docs employed by a hospital where the Hospital charges excessive facility fees and negotiates larger reimbursement rates than insurance companies allow private Docs......and the spending increase is whose fault again?

jkuriyan (11/29/2012 at 10:08 AM)
Because of the promotion of integrated care management & delivery ACA encourages provider consolidation so we cannot just talk about breaking up provider groups as a way to increase competition.