Later this year, Anthem, Cigna, Aetna and Humana will all argue their respective mergers don’t run afoul of antitrust laws. Aetna also announced it was pulling out of 538 of the 778 county health insurance exchanges in 2017 due to lack of profit potential. After a honeymoon period, corporate healthcare providers are measuring the Affordable Care Act’s (ACA) impact.
PricewaterhouseCoopers reports consolidation is the top issue facing healthcare. The mandated expansion of coverage and cost control efforts have been through their first round of economic testing, and it appears consolidation — in one form or another — is the inevitable result.
The economic theory behind the ACA was that better cost controls would come from fostering competition and ensuring consumers had enough leverage with insurers and healthcare providers. That market-driven theory’s logical conclusion is that the most efficient business model would have multiple insurance companies competing in a single, national market.
You can attribute the ACA’s state-based solution, in part, to extreme partisan overreaction and historic preference for state-level regulation of insurance products. Currently, we have 50 markets and 51 regulators.
Regardless of the culprit, the mechanism that added 20 million people to the insurance rolls also came with additional, and unnecessary, costs in the form of regulatory compliance and reporting.
To be clear, there is a difference between a public option and nationalized healthcare. As some have pointed out, Congress could have fixed the ACA by deregulating across state lines. Others argue that we should skip a step and embrace the so-called public option. Both stir so much political anxiety that either course would likely mean starting back at square one. What’s gotten less attention is an idea that would actually fuse a national regulatory approach with a nationalized market-based solution.
In effect, a healthcare wallet for all consumers, one that takes its cues on transparency and cost-cutting from some of tech’s biggest success stories.