Morning Briefing
Summaries of health policy coverage from major news organizations
Insurers' Bargaining Muscle Gains Strength
The Wall Street Journal: Why Health Insurers Are The New 800-Pound Gorillas
Health insurers’ bargaining power is set to grow. That is an issue for all health-care investors. The latest reminder: news Monday that health insurer Anthem is suing one of its vendors, the pharmacy-benefit-management company Express Scripts Holding. And this isn’t a small-change legal action. ... Major insurers such as Anthem have been bulking up of late. Last summer, Anthem agreed to purchase Cigna for $48 billion, while Aetna agreed to purchase Humana for $34 billion. The companies expect the deals to close sometime this year. Assuming they do, these deals would give the insurers more leverage than ever before as they negotiate prices with health-care companies. That could have implications for the pricing power of companies throughout the system. (Grant, 3/22)
The Associated Press: Insurers Plot Test To Build Better Provider Directories
Some health insurers are hoping to ease headaches that can flare when customers try to confirm whether a doctor is covered in a plan's network of providers. The trade association America's Health Insurance Plans will soon start testing a more efficient way to update insurer provider directories, which are becoming critical for finding the right fit as insurance evolves and coverage networks shrink. America's Health Insurance Plans, known as AHIP, will attempt to streamline directory updates by testing a new concept next month in California, Florida and Indiana. AHIP will have one health information technology company contact providers for regular updates on standard information like whether they are accepting new patients and if they are still in a coverage network. Then AHIP will share that information with several insurers. (3/22)
Also in the news, why venture capitalists are eyeing the health insurance industry —
Modern Healthcare: Why Venture Capital Firms Are Pouring Money Into Health Insurance
Venture capitalists and entrepreneurs have been investing and building new health insurance and related companies at a torrid pace—which may seem odd, because the industry is highly regulated and has relatively low profit margins. But widespread consumer dissatisfaction with dominant carriers and the Affordable Care Act's new marketplaces for individual plans has created an opening for innovators to come up with alternative approaches and has primed investors to take a chance on what they're pitching. ... However, these alternative companies, many of which are in their infancy, have a lot to prove. (Herman, 3/19)
