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November 11, 2015

‘Keep your focus on consumers, not on saving your business model’

‘Keep your focus on consumers, not on saving your business model’

Emily Kubis | Nashville Post

Panelists debate planned insurance mergers; regs called outdated

With mergers on the horizon among the country’s four largest health insurance companies, many in the health care industry are concerned about consolidation’s impact on both providers and consumers.

Panelists covered these issues Wednesday at a Nashville Health Care Council event, discussing what concerns providers have if the Department of Justice and Federal Trade Commission next year approve Aetna’s plan to buy Humana and Anthem’s proposed combination with Cigna.

“These deals, this unprecedented scale, will it benefit the consumers or not? I think that’s the essential question,” said Mindy Hatton, senior vice president and general counsel of the American Hospital Association. “And if it doesn’t benefit the consumer, can the consumer switch plans? There are benefits to competition in the market.”

The panel also discussed whether the mergers were grabs for market share in an uncertain industry or whether there are genuine opportunities for the companies to improve both consumers’ experience and financial standing through the deals.

“Some deals are well-motived, but not all,” said Mark Ganz, president and CEO of Cambia Health Solutions, who is pictured at left. “That worries me. In a changing time, traditional players will band together to get larger, and that’s a natural reaction. But there is such an opportunity in health care to redefine value for all the players.”

Marilyn Tavenner, president and CEO of America’s Health Insurance Plans and former administrator of the Centers for Medicare and Medicaid, said the two deals had different goals. The merger between Aetna and Humana focuses more on innovation, she said, and improving delivery system reform for the companies’ managed Medicare plans. On the other hand, Anthem and Cigna’s deal would be more oriented to the companies’ commercial plans and “decreasing the cost of administrative functions.”

Another issue for providers is whether the deals might hinder the industry’s push toward value-based payment and some of the innovative partnerships that have already developed. But Hatton said a larger issue for those relationships are regulations like Stark Laws and the Anti-Kickback Statute, which she called “outdated” in the era of accountable care organizations and bundled payment initiatives.

The panelists also briefly discussed predictions for the 2016 presidential election, telling attendees that there are opportunities to educate legislators and candidates, but that health care companies should not react to the “noise” of the campaign.

“Stay toward your vision and on your strategy and execute,” Ganz said. “Keep your focus on consumers, not on saving your business model. We have the ability to play to the consumer and there is no entity that can stop that.”

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