A new report from Elevance Health—the large, for-profit commercial insurer formerly known as Anthem—points fingers at hospital consolidation while it is a national health plan behemoth, dominating many insurer markets. At the same time, Elevance is pocketing large profits, including earning nearly $2 billion in net profit in the second quarter of this year alone. In addition, commercial insurers are notorious for slow or no payment to hospitals and for pre-authorization delays that put patients’ health at risk and contribute to clinician burden and burnout.
The Elevance report, which appears to be based on a working paper, and the Modern Healthcare article have many shortcomings, including failing to recognize the potential immense benefits of hospital and health system mergers for patients. The authors of the working paper themselves acknowledge that “system ownership and being part of a larger firm do not confer an unusual price advantage;” “when hospitals join together to create a new system, they obtain very little price benefit;” and that “larger systems do not obtain higher prices for their targets than smaller systems do.” The independent academic study cited in the article discusses a range of other advantages that systems bring, which are never mentioned in the article.
Perhaps the most glaring omission is the recognition that mergers often prevent struggling hospitals from closing—especially in rural and other medically underserved areas—and that it is inadequate payment by health plans that destabilizes these providers to begin with.
With all the recent news coverage on the bad behavior of commercial insurers, let’s take this latest “report” for what it is—another attempt to distract from the reality of how some commercial insurers delay and deny patients access to care.
Rick Pollack, president and CEO, American Hospital Association