The Council for Affordable Health Coverage (CAHC) launched a new public awareness campaign saying that consolidation among health insurers, hospitals and other health care organizations has reduced competition, increased costs and limited choices for patients and employers.
The campaign, titled “Bigger Companies. Fewer Choices. Higher Costs.,” said that a growing concentration of market power among a small number of large health care organizations has contributed to rising health care costs while leaving consumers with fewer options for coverage and care.
“The evidence is unmistakable: the ACA fueled tremendous growth among health insurance companies, making them larger than ever. There are those who advocate directing even more resources toward these industry giants — but those resources instead should go directly to patients,” said Joel White, president of CAHC.
The group said that health care markets function best when patients and employers have multiple choices and providers compete on price and quality. However, the organization argues that hospitals across the country have consolidated into large regional and national systems while major insurers have expanded through acquisitions of physician practices, pharmacy benefit managers, pharmacies and clinics.
The result, according to the group, is a health care system in which patients may appear to have choices, but many of those options are controlled by a small number of large organizations. The campaign argues that when only a handful of hospitals or insurers dominate a market, employers, businesses and families have fewer alternatives and less negotiating leverage.
The campaign also highlights what it describes as a growing affordability challenge for American families. According to data cited by the organization, health insurance premium growth has significantly outpaced both inflation and worker earnings over the past quarter century, creating a widening gap between the cost of coverage and household income.
Without reforms, the typical American family could spend as much as 40% of household income on health insurance premiums by 2032, according to the campaign.
The organization also argues that federal and state health care policies have contributed to consolidation by adding layers of mandates, reporting requirements, compliance systems, benefit requirements and payment structures that larger organizations are better equipped to manage than smaller competitors.
According to the campaign, those dynamics have placed increasing pressure on smaller insurers, independent physician practices and community hospitals to merge, sell or leave the market, further reducing competition.
The initiative includes a dedicated website featuring research, data and educational materials examining the relationship between market consolidation, competition and health care affordability. The organization said the campaign is intended to encourage policymakers to pursue reforms aimed at increasing competition and expanding consumer choice throughout the health care system.
