← Back to Insights
November 27, 2024
Authors
David Burda
Topics
Economics Policy System Dynamics
Channels
Blogs

AMA Says Insurers Are Using Their Market Power to Screw Patients and Providers

When I started this Healthcare Blame Game series I didn’t think the rounds would pop up on a near-weekly cadence, but here we are.

The series is based on my idea that incumbent healthcare industry stakeholders take turns blaming each other for high costs, limited access and poor quality while agreeing amongst themselves to not really do much about it lest they blow up the status quo that’s made their respective sectors all very profitable.

This week’s episode in the long saga is thanks to the American Medical Association (again) and the AMA’s latest annual report on health insurance market consolidation. The AMA released its report, Competition in Health Insurance: A comprehensive study of U.S. markets, on Nov. 19.

The 74-page report is based on 2023 health insurance enrollment data from 382 metropolitan statistical areas (MSAs) in 50 states and the District of Columbia. Here’s what the report said:

  • 364 of the MSAs, or 95%, were considered “highly concentrated” under the antitrust merger guidelines used by the U.S. Justice Department and the Federal Trade Commission.
  • In 181 of the MSAs, or 47%, one health insurer controlled more than 50% of the market.
  • 372 of the MSAs, or 97%, the Medicare Advantage market was highly concentrated.
  • In 116 of the MSAs, or 30%, one health insurer controlled more than 50% of the MA market alone.

I’ll let the report do the rest of the talking at this point.

“High concentration levels in health insurance markets are largely the result of consolidation (i.e., mergers and acquisitions), which can lead to the exercise of market power and, in turn, harm to consumers and providers of care. Both consummated and proposed mergers and acquisitions involving health insurers should raise serious antitrust concerns,” the report said.

Further: “Conceptually, mergers and acquisitions can have beneficial and/or harmful effects on consumers. However, only the latter has been observed. It appears that consolidation has resulted in the possession and exercise of health insurer monopoly power—the ability to raise and maintain premiums above competitive levels—instead of the passing of any benefits obtained through to consumers.”

In short, insurers are using their market power to screw patients and providers and enrich themselves. I’m less polite than the AMA, but we’re saying the same thing. Hey, that would make a good headline for this post. So be it.

If you want to read more installments in this series, check out:

About the Author

David Burda

David Burda began covering healthcare in 1983 and hasn’t stopped since. Dave writes this monthly column “Burda on Healthcare,” contributes weekly blog posts, manages our weekly newsletter 4sight Friday, and hosts our weekly Roundup podcast. Dave believes that healthcare is a business like any other business, and customers — patients — are king. If you do what’s right for patients, good business results will follow.

Dave’s personnel experiences with the healthcare system both as a patient and family caregiver have shaped his point of view. It’s also been shaped by covering the industry for 40 years as a reporter and editor. He worked at Modern Healthcare for 25 years, the last 11 as editor.

Prior to Modern Healthcare, he did stints at the American Medical Record Association (now AHIMA) and the American Hospital Association. After Modern Healthcare, he wrote a monthly column for Twin Cities Business explaining healthcare trends to a business audience, and he developed and executed content marketing plans for leading healthcare corporations as the editorial director for healthcare strategies at MSP Communications.

When he’s not reading and writing about healthcare, Dave spends his time riding the trails of DuPage County, IL, on his bike, tending his vegetable garden and daydreaming about being a lobster fisherman in Maine. He lives in Wheaton, IL, with his lovely wife of 40 years and his three children, none of whom want to be journalists or lobster fishermen.

Recent Posts

Innovation
Physicians Freaking Out Over Control
I’ve never knowingly used artificial intelligence in my personal or professional life. I’ve never asked a personal voice… Read More
By December 4, 2024
System Dynamics
Time to Slay Healthcare’s Dragons
As healthcare headlines continue to highlight rising costs and systemic inefficiencies, David Johnson and Paul Kusserow deliver a… Read More
By December 3, 2024
Outcomes
How Healthcare Revolutionaries Think: 10 Questions with Hal Andrews
Welcome to the latest installment of 4sight Health’s series, How Healthcare Revolutionaries Think. Our interview series profiles healthcare… Read More
By November 26, 2024