Big insurers getting too big, too powerful, AMA study concludes

The Association calls for greater government scrutiny of health plan mergers and for collective bargaining for independent physicians.

By Amy Snow Landa, AMNews staff. Dec. 3, 2001.

Washington -- A new AMA study presents evidence confirming what physicians have long suspected: In many parts of the country, a few large companies dominate the health insurance market to such an extent that doctors and patients are at a severe disadvantage.

The AMA released the study, which was billed as the first comprehensive analysis of health insurance markets across the country, at a Nov. 19 news briefing in Washington, D.C.

The Association hopes that policymakers will view its findings as the hard evidence they need to take action to rein in the market power of large insurers.

"The study gets down on paper something that patients and physicians have learned through painful experience -- that in many health insurance markets across the country, health insurers have excessive leverage," said Donald J. Palmisano, MD, secretary-treasurer for the AMA Board of Trustees.

The study's findings support that perception. A significant number of health insurance markets around the country were found to be "highly concentrated" according to standards the Federal Trade Commission and Dept. of Justice set out in their guidelines for evaluating market competition.

In fact, in some of those markets, a single health insurer is so dominant that it holds a combined HMO/PPO market share that is in excess of 30%, 40% or sometimes even 50%, the study showed.

In Philadelphia, for example, one insurer holds 55% of the combined HMO/PPO market share -- the highest share held by a single insurer in the 40 metropolitan areas studied. [...]