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Can Consolidation Work In Favor of Improved Care?

MANAGED CARE November 2003. © MediMedia USA
Editor's Memo

Can Consolidation Work In Favor of Improved Care?

John A. Marcille
MANAGED CARE November 2003. ©MediMedia USA

John A. Marcille

As we were going to press, huge managed care merger news broke. Anthem plans to purchase WellPoint for $16.4 billion, thereby creating the largest health insurer in the nation. This is the exclamation point to a story long tracked here and elsewhere: the continuing merger of plans that are part of the Blue Cross and Blue Shield Association.

Meanwhile, UnitedHealth Group, currently the largest insurer, plans to buy Mid Atlantic Medical Services for about $2.7 billion in cash and stock. That still keeps WellPoint (by which name the merged Blues entity will be known) out in front, with about 26 million members, compared to the 20 million members UnitedHealth will have after its transaction goes through. (Regulators in the states involved must approve both deals.)

Reaction inside and outside the industry was swift and intense. What about competition? The companies will together provide insurance to about 46 million members, or 27 percent of U.S. residents who have private health insurance.

The AMA's President Donald Palmisano, MD, worries that this will lead to "a health care system dominated by a few publicly traded companies that operate primarily in the interest of shareholders."

The Wall Street Journal has a rosier view and hopes that the mergers lead to "greater standardization and simplification of an enormously complex system."

We wish the same, as our cover story this month on practice variation illustrates just how much the system could use such standardization.

For instance what are the chances of a Medicare enrollee experiencing an ICU admission in his or her last six months of life in Sun City? Well, that depends, according to a study cited in our story. In Sun City, Ariz., only 14 percent of decedents had an ICU admission. In Sun City, Calif., 49 percent did.

We assume — we hope and pray — that a health plan present in both cities would take a long, hard look at that discrepancy. And then do something about it.