Competition in health care research – American Medical Association
The Division of Economic and Health Policy Research conducts independent research on competition in health insurance markets. It has also begun conducting study on pharmacy benefit manager (PBM) markets.
A key question of public policy is whether medical health insurance markets are competitive or whether insurers have market power, which can harm consumers and healthcare providers. A useful indicator associated with competition plus market power is marketplace concentration. The particular U. S. Department of Justice and the Federal Trade Commission examine concentration in their evaluation associated with proposed mergers between firms.
One of the division’s most significant efforts will be the annual Competitors in Health Insurance (CHI) study. This annually updated study is the only publication of its kind. It is based on an analysis associated with unique enrollment data from a single data source for health insurers in all states and metropolitan statistical areas (MSAs) of the particular U. H. The division has also conducted analyses of past plus proposed mergers among wellness insurers.
This year the division began conducting analysis on PBM markets. Using unique registration data on commercial drug coverage lives from the particular same data source used for its CHI study, the division offers published a paper as part of its Plan Research Perspectives (PRP) series that aims to shed light on this understudied market.
Competition in Health Insurance, 2022 update
Competition within Health Insurance, 2022 up-date
The 2022 update to Competition in Medical health insurance: A Comprehensive Study of U. S. Markets (PDF) presents 2021 data on the degree associated with competition within commercial health insurance marketplaces, and for the first time, in Medicare Advantage markets. It is intended to help identify areas where consolidation involving health insurance companies may cause anticompetitive harm to customers and providers of care.
The study reports the two largest insurers’ market shares as well as the concentration levels (HHIs) for state- and MSA-level markets within the Oughout. S.
Key findings from the 2022 upgrade include:
- Seventy-five percent (287) of MSA-level markets were highly concentrated (HHI> 2, 500) in 2021, up from 71% in 2014.
- The average HHI across MSA-level markets was 3504 in 2021.
- Fifty-eight % of markets experienced an increase in the particular HHI between 2014 and 2021. Among those markets, the average increase was 540 points.
- Of the marketplaces that were not extremely concentrated within 2014, 30% experienced a good increase in the HHI large enough to place them within the highly concentrated category by 2021. Another 33% also had an increase, though not big enough to make them highly focused.
- In 91% (349) associated with MSAs, at least one insurer held a commercial market share of 30% or greater, and in 48% (183) of MSAs, one insurer’s share was at least 50%.
- A Blue Cross Glowing blue Shield (BCBS) insurer had the largest state-level market share in 40 states.
- A BCBS insurer experienced the biggest MSA-level marketplace share within 81% (311) of MSAs.
- Anthem got the largest MSA-level market share in 21% (82) of MSAs.
- At the national level, UnitedHealth Group was the biggest commercial wellness insurer within the U. S. plus Centene was the largest insurer in the particular exchanges.
Maps through the research
Medicare Benefit markets
- Seventy-nine percent (299) associated with MSA-level marketplaces were highly concentrated (HHI> 2, 500) in 2021, down from 87% in 2017.
- The typical HHI throughout MSA-level marketplaces was 3331 in 2021.
- In 91% (347) of MSAs, a minumum of one insurer kept a market share associated with 30% or even greater and in 34% (131) of MSAs, 1 insurer’s discuss was at least 50%.
- At the national degree, UnitedHealth Group was the largest health insurer within the Oughout. S.
Maps from your study
Competition in Commercial PBM Markets plus Vertical Integration of Wellness Insurers with PBMs
Competition in Industrial PBM Marketplaces and Vertical Integration associated with Health Insurers with PBMs
Making use of novel 2020 data upon commercial medication coverage life based on five PBM functions, this PRP titled Competitors in Commercial PBM markets and Straight Integration of Health Insurance companies with PBMs (PDF) presents the descriptive analysis of PBM markets and the provision of PBM services in order to health insurance providers. It reviews the ten largest commercial PBMs plus drug insurers in the particular U. T. at the national level. The particular paper furthermore presents the two largest PBM marketplace shares and the concentration levels (HHIs) for all state- and MSA-level marketplaces. Finally, it quantifies the particular extent associated with vertical integration of wellness insurers along with PBMs.
Important findings through the paper include:
- In the national level, the top four PBMs provide rebate negotiation with regard to a collective 66% of commercial drug lifestyles. The results are similar regarding retail network management plus claims adjudication.
- Of the best 10 PBMs that provide rebate negotiation, six are usually used exclusively by a single insurer or set (Blues) of insurance companies.
- For the other 2 PBM functions—formulary management and benefit design—about 37% of drug lives are managed by insurance providers “in house. ”
- The standard HHIs within state-level plus MSA-level discount negotiation markets are 3746 and 4103, respectively. The numbers are similar for retail network management and claims adjudication markets.
- At the particular national degree, 69% associated with commercial drug lives are with a vertically integrated insurance provider. Although the averages across says and MSAs are slightly lower (63% and 65%), there is wide variation among states and MSAs.
Research around the Anthem-Cigna and Aetna-Humana mergers
Study within the Anthem-Cigna and Aetna-Humana mergers
AMA carried out analyses (see below) of the likely impact that the blocked Anthem-Cigna and Aetna-Humana mergers would have had upon commercial marketplaces and associated with the Aetna-Humana merger on Medicare Advantage markets. The particular analyses found that each of the mergers would have probably been anticompetitive in numerous markets across the U. S.
Read more about the particular AMA’s successful efforts to block the Anthem-Cigna plus Aetna-Humana mergers .
Research upon the UnitedHealth-Sierra Health merger
Research for the UnitedHealth-Sierra Health merger
This particular paper (PDF) examines the particular association among health insurance market focus and prices. It is a case study of the 2008 combination between UnitedHealth Group and Sierra Wellness Services.
It found that health plan premiums in Nevada markets increased simply by 13. 7% after the merger. The findings suggest that the particular merging parties exploited the market power gained from the merger.