Anticompetitive markets mark most managed care plans, AMA study finds


Only in response to it’s opposite can the gravity of competition truly coagulate. As such, the American Medical Association (AMA) decided to adjust its analytical scope and hone in upon anticompetitive market power for its latest study regarding managed care plans in the United States.

For the 2012 issue of the Competition in Health Insurance: A Comprehensive Study of U.S. Markets report, health insurance market shares in 385 metropolitan areas in all 50 states and the District of Columbia were scrutinized to glean which locales were least competitive.

Among the 50 states, the below rang in as the top 10 least competitive commercial insurance markets:

Click to enlarge.

All data and information from the AMA's "Competition in Health Insurance: A Comprehensive Study of U.S. Markets" report. Presentation by PhysBizTech.

Other findings of interest from the report include:

  • A significant absence of health insurer competition is present in 70 percent of the metropolitan areas studied by the AMA. These markets are rated "highly concentrated," based on the 2010 Horizontal Merger Guidelines issued by the U.S. Department of Justice and Federal Trade Commission.
  • In 67 percent of the metropolitan areas studied by the AMA, at least one health insurer had an HMO market share of 50 percent or greater.
  • In 68 percent of the metropolitan areas studied by the AMA, at least one health insurer had a PPO market share of 50 percent or greater.
  • In 68 percent of the metropolitan areas studied by the AMA, at least one health insurer had a POS market share of 50 percent or greater.

"It appears that consolidation has resulted in the possession and exercise of health insurer monopoly power," the study authors noted. Increased premiums, watered-down benefits and insurers' growing profitability were highlighted by AMA report affiliates as evidence that highly concentrated markets harm patients and physicians.

The annual analysis now explores three distinct health insurance markets: point-of-service plans (POS), health maintenance organizations (HMO) and preferred provider organizations. While the latter two categories have become customary to the AMA report, POS investigation made its debut to the schema this year.

"The broad scope of the new AMA analysis provides the most complete picture of the consolidation trend in health insurance markets," said AMA President Jeremy A. Lazarus, MD, in a news release."The new data demonstrate that most areas of the country have a single health insurer with an anticompetitive share of the HMO, PPO or POS market." 

 

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