As insurers design a healthcare market that is evermore concentrated, where does that leave Americans looking for a competitive plan?
Nearly 73% of markets were highly concentrated in 2022, a new study says. This poses major problems for both consumers and healthcare providers.
The 2023 edition of Competition in Health Insurance: A Comprehensive Study of U.S. Markets looked at 381 metropolitan statistical areas (MSAs), across 50 states and Washington D.C. To be considered "highly concentrated," markets had to exceed a regulatory threshold set by federal guidelines.
Focusing on data ranging from 2014 through 2022, the study found that 73% of commercial markets at MSA levels were highly concentrated in 2022, an increase from 71% in 2014. The study also found that concentration was on the rise, with more than half (53%) of the markets that were already highly concentrated in 2014, becoming even more so by 2022.
Moreover, with current proposed federal guidelines, 95% (363) of MSA-level markets would be highly concentrated.
The study shows that over time not much has changed for the biggest names on the list. In fact, the top four insurers had identical rankings in both 2014 and 2022. In both years, UnitedHealth Group had the largest market share: 16% and 14%, while Elevance Health (formerly Anthem) came second with shares of 13% and 12%.
The study also found that of 48% MSAs, just one health insurer held a market share of at least 50%.
Nationally, the top ten largest health insurers by market share were:
The study examined exactly how these anticompetitive practices lead to harmful effects in the system. "When an insurer exercises market power in its output market (the sale of insurance coverage), premiums are higher and quantity of coverage is lower than in a competitive market… When an insurer exercises market power in its input market (e.g., physician services), payments to providers and the quantity of health care are below competitive levels," the study stated.
AMA President Jesse M. Ehrenfeld, M.D., M.P.H. wrote about how the high concentration of the markets is detrimental to both providers and consumers. "Reversing the trend toward consolidation in health insurance markets is the right prescription to cut exorbitant health care costs, improve outcomes and boost the quality of care," Ehrenfeld wrote.
Ehrenfeld went on to state that the AMA supports guidelines that were proposed earlier this year by the Federal Trade Commission and the Depart of Justice to limit mergers amongst payers. These guidelines would call for more careful examination of mergers and acquisitions and would work to limit future consolidations.
Overall, this study presents evidence to confirm that insurers are creating a highly concentrated market with their anticompetitive behavior and exercise of market power, which is in turn, causing great harm to consumers and care providers.
RTLs has been able to boost Aurora’s patient visits, streamline provider and staff workflows, and more.
RTLs have a long history with health systems to keep track of supplies, devices,and patients. With Healthcare executives now applying the tech to chart patient and provider workflows and improve care coordination, here’s how one healthcare provider is making them work.
Aurora Health Care spans just under 30 hospitals and 600 care sites, now they are using RTLs in new clinics to direct patients to their exam rooms, coordinate care teams, and reduce wait times.
Aurora’s manager of clinic operations Elise Dieringer talks about how making use of the RTLs has been able to boost Aurora’s patient visits, streamline provider and staff workflows, and overall improve care quality and coordination.
Learn more about how Aurora Health Care is making use of the technology to enhance workflows below. You can check out Eric Wicklund’s full story with Dieringer here.
One leader at Blue Shield California shares the company's strategic priorities.
Dr. Pushwaz Virk serves as the Medical Director of Clinical Product Development, Care Innovation, and Technology Integration at Blue Shield of California.
With 4.8 million members in individual and family, Medicare Advantage, Medicaid, and group employer plans across California, Virk has no shortage of pressure when leading out strategic initiatives for the company.
Not only is Virk a practicing physician, he also leads plan iteration efforts in the face of technology challenges and opportunities.
Read his top three strategic priorities across members, providers, partners, and communities. You can also catch up on Laura Beerman’s full story with Virk here.
By the end of 2023 Clover Health will exit the program after inadequate results in Medicare direct contracting.
After two years of poor performance within the ACO REACH program, Clover Health is exiting.
While the company will fulfill its obligations to the program for the rest of the performance year, after that it will move on in search of sustained profitability. The decision will have no impact on its ACO REACH beneficiaries, according to the Clover’s news release.
Clover’s decision to join the ACO REACH program in 2021 came as a way to expand the company in the traditional Medicare sector; they hoped to expand their number of lives under their AI program Clover Assistant, and to generally increase the number of physicians they worked with.
However, under ACO, the company saw millions in disappointing losses.
According to Clover’s 2022 earnings report, the insurer saw $84 million in loss in Q4 of 2022, albeit a sizeable improvement from the $187.2 million loss incurred over the same period in 2021. For the full year, losses were $338.8 million in 2022, compared to $587.8 for 2021.
At the time, Clover Health CEO Andrew Toy said the company was focused on continuing to make gains to quickly turn losses into profit.
"In 2023, accelerating our path to profitability is our top priority, and I am excited by Clover Assistant's role in helping physicians identify and manage chronic diseases earlier, which improves care for Medicare beneficiaries," Toy stated.
What went wrong?
Clover attempted to counteract their poor 2021 results by cutting back their number of physicians they had in the program by two-thirds, but still weren’t able to recover.
Despite the repeat losses, Toy remains optimistic about the company’s future into 2024 and beyond.
Toy mentioned in a statement that while Clover did see the benefits of joining ACO REACH, the insurer is choosing to stick with its Medicare Advantage (MA) plans, which have proven more profitable.
“We remain extremely excited about the success of our Medicare Advantage insurance business in 2023 and intend to focus our resources on building that business and continuing to invest in Clover Assistant as part of our path to profitability,” Toy said in a press release.
Toy went on to say that the company expects “meaningful tailwinds” in 2024 from a number of factors including their partnership with UST HealthProof to outsource their administration workload, which saved them $30 million.
“Overall, this narrower focus gives us even greater optimism that Clover Health can deliver profitability on an Adjusted EBITDA basis for full-year 2024,” Toy said.
Art Gottlieb, principal for A2 Strategy Corp, called Clover’s exit one in a series of “wise moves” by the company, in addition to their UST partnership.
Gottlieb went on to say in a LinkedIn post: “Now if they were to shut down the Clover Assistant and just focus on the MA plan and semi-quarterly, critically acclaimed Clover Living print magazine, they might actually have something of value that another company would be interested in buying. It won't be worth billions of dollars, but it certainly is better than the alternative…”
Currently, Clover falls in average ratings for Medicare. In 2022 the company received 3 out of 5 stars from CMS, and 2023 3.5 stars. The 10-year-old company is currently valued at $457.8 million.
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