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How health insurer mergers could boost care management programs


Though some have expressed concerns about the anticompetitive effects of the mergers among the nation's largest health insurers, one major benefit of consolidation is that it's likely to accelerate the industry's use of effective care management programs, according to an opinion piece from CNBC.

The fragmented array of care many Americans currently receive results in widely varying prices and outcomes, writes Jon Kaplan, a senior partner at the Boston Consulting Group. Furthermore, the fee-for-service model fails to control rising costs because it doesn't focus on improving patients' health.

But the companies that pay for healthcare have discovered a better way with the Medicare Advantage program, which uses preferred provider networks, financial incentives and care management to lower costs and keep patients out of the hospital, Kaplan writes.

Indeed, Medicare Advantage may be a more powerful tool than even Meaningful Use to power healthcare reform, NaviNet CEO Frank Ingari has written previously.

And when Kaplan's company evaluated claims data for 3 million Medicare patients in 2013, it found that patients in managed care programs such as a capitated HMO plan achieved better outcomes than their fee-for-service counterparts, including lower mortality rates, fewer hospital admissions and shorter hospital stays.

The country's major insurers have learned from these results, Kaplan argues, and continue to develop better care models to keep costs low. That's why the coming mergers are a good sign, as they would lend greater scale and market power to these companies' expertise in managed care.

"The mergers we see ahead should enhance their capabilities, leading to additional reforms, better outcomes and further cost savings," he writes.

Dan Hilferty, CEO of Philadelphia-based Independence Health Group, had a similarly positive view of the mergers, telling FierceHealthPayer recently that "it's an incentive for us to find like-minded partners."

The American Hospital Association, however, has come out strongly against the mergers, arguing that any cost savings health insurers are able to achieve are unlikely to be passed onto consumers.

To learn more:
- read the opinion piece

Related Articles:
Medicare Advantage may be best program to power healthcare reform
American Hospital Association takes aim at Anthem-Cigna merger
A glass-half-full view of health insurer consolidation
Big insurer deals could drive similar action among hospitals