The dance cards have sure changed over the last six months. Whatever happened to the Anthem and Cigna merger? What about Anthem’s partnership with Express Scripts? Did they ask CVS to dance instead? But now CVS is asking to dance with Aetna. And Cigna decided it wants to hit the floor with Express Scripts.
Never mind the wandering eyes of the players, we want to know if any of these moves will help employers better manage health plan costs? Will the new partnerships result in better-negotiated rates with providers and drug manufactures? Will they enable the power couples to better manage rapidly increasing specialty drug costs? And, most importantly, will this greater size, market concentration, and integration lead to lower employer-sponsored health plan costs?
We are willing to bet the answer is “no.” Market concentration rarely benefits the end-user. More often, it elevates the businesses forming the oligarchies. We anticipated this years ago when the Affordable Care Act created Accountable Care Organizations (ACOs). ACOs were supposed to create integrated delivery systems that would better manage patient care, costs, and outcomes. Instead, it led to further market consolidation and more bargaining power for large health systems.
And how did the rest of the market respond? With its own version of consolidation to counter the growing clout of these large health systems, of course. Is this good for employers? We guess it remains to be seen, but while power is being concentrated in ever larger health systems, insurance companies and PBMs, employer and employee costs for health care services continue to rise.
Some maintain an employer’s best solution is to adopt a similar size-equals-strength philosophy by participating in group purchasing arrangements. But for most, this isn’t a great option either, as a majority of such cooperatives have simply become sales vehicles for the PBMs and revenue generators for the sponsoring organizations.
So where does that leave anxious employers on the crowded dance floor? Most likely looking on from the safety of their seats for the time being. Despite all the hype generated by a flurry of recent media coverage, practical experience shows us that hands-on employer management still delivers the greatest value for plan sponsors and their members.