Health insurance mergers are cause
for examination
April. 14, 2007
The recent merger announcement from Highmark Blue Cross of Pittsburgh
and Independence Blue Cross of Philadelphia has both patients
and health-care professionals from throughout the state considering
if the union will be a blessing or curse.
According to a joint news
release from both Highmark and Independence Blue Cross on March
28, the new, combined company will hold administrative
fees flat for two years, better manage prescription drug costs,
and provide more than $650 million to expand access to the uninsured.
The companies also claim that the merger will be good for the
state economy, employing 18,000 people statewide and generating
an estimated $4 billion to the Pennsylvania economy.
We can respect those goals and contributions of the new company
and hope they hold true.
However, we know that the new company will be by far the largest
health insurer in Pennsylvania and one of the largest in the country.
News reports indicate the new company will be the third largest
health insurer in the United States.
Within the Blue Cross family, mergers appear to be a national
trend, where only about a decade ago, there were 110 Blues nationally,
and now there are less than 40. News reports indicate that the
new company would automatically own 53 percent of the Pennsylvania
health insurance market.
This raises cause for concern.
Historically, the Pennsylvania Medical Society has voiced strong
concerns when insurers decide to merge.
Though there is currently no market overlap, and economies of
scale should be realized, reduced competition will result.
References :
http://www.thereporteronline.com |
