Health plans' dominance: More muscle in more markets

The latest AMA study on insurers' market share shows that it's greater than ever -- and that it's time to take steps to change that.

Editorial. April 4, 2005.

The American Medical Association's Private Sector Advocacy group periodically studies health plan market concentration to determine what metropolitan areas and states might be problem markets because of the dominance of a few insurers. The AMA's latest findings are neither surprising nor reassuring: The chips are stacked against physicians in pretty much every market in the country, now more than ever.

In fact, in the four years the AMA has released its annual report, "Competition in Health Insurance: A Comprehensive Study of U.S. Markets," health plan market concentration has continually grown worse, as measured by the Dept. of Justice's own scale.

Of the 92 metropolitan areas in 21 states studied, 93%, or 86, would be considered "highly concentrated" HMO/PPO markets using Justice Dept. guidelines, according to the 2004 version of the report, released in February. Of the 27 other states where reliable metropolitan-level data were not available, the result was the same -- 93%, or 25, of those states would be considered "highly concentrated" in the HMO/PPO market. (Alaska and Mississippi were not included in the study because data were not available.)

For PPOs alone, the metropolitan and state data reveal that fully 100% of them would be considered "highly concentrated." That's a first for the AMA study.