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Doctors and Plans Blame Each Other for Costs

John Commins, for HealthLeaders Media, November 29, 2012

"It appears that consolidation has resulted in the possession and exercise of health insurer monopoly power," the study says. AMA says those monopolies have increased premiums, watered down benefits, and increased insurers' profitability, which the physicians' association says demonstrates that highly concentrated markets harm patients and physicians.

Pauly says he'd be more sympathetic to the complaints of physicians if they "are willing to break up some of their doctor market power as a quid pro quo."

"Of the two kinds of non-competitiveness, I'm more worried on the non-competitiveness on the seller of services side than on the insurers' side, because insurers can be replaced fairly easily," he says. "There is nothing special about a Blue plan other than some consumer loyalty to the trade name. But there is something special about your own doctor, and hospitals are not so easily interchangeable."

Wright believes the AMA study and the AHIP response inadvertently say more about what is wrong with healthcare delivery than the two sides' accusations and counter-charges about monopolistic practices.

"The sad part is that our healthcare costs are more dictated by the healthcare market than they are the actual delivery and quality of care," he says. "Healthcare prices and healthcare premiums are much more a function of the providers' and insurers' relative market positions than they are about the cost of providing care of the quality of the care provided. Under our current healthcare system, that is what dictates our prices more than cost and quality, which are the things that people would presume would dictate the costs."


John Commins is a senior editor with HealthLeaders Media.

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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.