Consolidation fever

Kaiser Health News anticipates the consolidation in insurer and provider markets due to the new health law.

Bloomberg Businessweek reports that … health insurers are “moving towards an oligopoly” accelerated by the new law. … The health-care overhaul is likely to push at least 100 insurers with 200,000 members or less out of the business ‘as the plans are increasingly unable to invest in the infrastructure and technology to effectively manage care.’ …

In the meantime, doctors are being driven together in practice by health reform and “solo practices could be on the way out,” National Journal reports. …

Doctors are increasingly looking to band together in ACOs to reduce costs and put themselves in line for the Medicare money such organizations are likely to see after health reform is implemented. “The big question now is not whether accountable care organizations are the future, but who will control that future.”

We saw this coming, right? How the money will flow from Medicare through the new provider organizations is the trillion dollar question.Whether hospitals or primary care doctors (or some other entity) controls how its distributed will determine if and how this whole experiment will work.

The other big issue is that provider integration under ACOs (or otherwise) are fine and good for Medicare, but somebody needs to think through the consequences for the private side of the market. Which way will the insurer-provider market power battle push premiums? I’ve been asking this question, reading and posting on literature relevant to it, and thinking about it for a year now.

With all that work, you’d think I’d have made some progress in addressing it. Actually, I have, but only a little. More to come.

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