Healthcare Mega Mergers Impact on Physicians

Just a few weeks after American Medical Association (AMA) President Jesse M. Ehrenfeld, MD, MPH, publicly called out his growing concern about a national physician shortage and the worrying state of the American healthcare system, the validation of his fears came through loudly and clearly in news reports about a healthcare mega-merger.

In late November, both Reuters and The Wall Street Journal, reported that health insurers Cigna and Humana were in talks to merge and create what would be “a new powerhouse in the health-insurance industry.” While Cigna called off its pursuit of Humana about a week later and said instead it will focus on a big stock buyback, the emphasis on financial returns over patient care in healthcare remains the same.

 The potential consolidation of insurers or other healthcare businesses is just one of several “critical strains on physicians” that add to a list of challenges that includes a broken Medicare payment system and enormous administrative burdens, Dr. Ehrenfeld said at the National Press Club.

 He added, “Physicians everywhere—across every state and specialty—continue to carry tremendous burdens that have us frustrated, burned out, abandoning hope … and in increasingly worrying numbers, turning our backs on the profession we’ve dedicated our lives to.” (This phenomenon of physician dissatisfaction has been discussed in our Medicine in America podcast interviews.) 

 A Cigna/Humana merger would have created a new company that rivaled in size UnitedHealth Group and CVS Health. It also would have ratched up the pressure and upheaval now standard in the provider-payer environment.

A little history is important here for context. Back in 2016, the Department of Justice sued to block the proposed acquisition of Cigna by Anthem and a separate deal between Humana and Aetna. DOJ alleged that the transactions – both of which failed to be completed – would harm individuals, employers, doctors and other providers “by limiting price competition, reducing benefits, decreasing incentives to provide innovative wellness programs and lowering the quality of care.”

Today, the same fears about consolidation of insurers are being expressed. 

“A merger between Cigna and Humana could ultimately be anticompetitive for smaller players — but it could also be a catalyst for further consolidation,” Advisory Board said in its daily briefing newsletter. “In most cases, consolidation does not equal better prices or more options.”

At Medicine in America, one of our goals is to track these changes across the healthcare landscape and to highlight the new models of care that are emerging and the physician entrepreneurs who are leading the way into the future of healthcare. 

Listen to a recent episode to hear how Lauren LaCute, DO, and Kim Lynch, CEO/Founder of Metis Health, are working on ways for “Reinventing Family Medicine with a Data-Driven, Value-Focused Medical Model.” 

Dr. LaCute made the jump from a hospital-owned academic practice where revenue targets were increasingly rigorous and “everything about medicine was rushed” to her own private practice specializing in family medicine.


Mark Tosh 

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