Insurer sees coming health insurer 'oligopoly,' doctors band together on system changes

Bloomberg Businessweek reports that health insurer WellPoint's investor-relations chief said Thursday that health insurers are "moving towards an oligopoly" accelerated by the new law. "New regulations on administrative spending and premium increases will push some independent insurers out of business or into deals with bigger rivals, said Michael Kleinman, vice president for investor relations, at a Wells Fargo & Co. conference in Boston. … Led by WellPoint, 12 health plans cover two-thirds of the enrollment in the U.S. commercial-insurance market, said Ana Gupte, a Sanford C. Bernstein & Co. analyst in New York, in a June 11 note to clients. The health-care overhaul is likely to push at least 100 insurers with 200,000 members or less out of the business 'as the plans are increasingly unable to invest in the infrastructure and technology to effectively manage care,' Gupte wrote" (Nussbaum, 6/24).

In the meantime, doctors are being driven together in practice by health reform and "solo practices could be on the way out," National Journal reports. "The health care reform law created pilot programs within Medicare to test [accountable care organization] models, with the expectation that they will begin to revolutionize the way that all doctors and hospitals deliver medical care. Better coordination between medical providers, the theory goes, should result in higher-quality care and lower costs. Beginning in 2012, the participating organizations, which will include doctors and hospitals, will be responsible for the overall care of the Medicare beneficiaries they serve. If an ACO measures up, its medical providers will share in the savings."

Doctors are increasingly looking to band together in ACOs to reduce costs and put themselves in line for the Medicare money such organizations are likely to see after health reform is implemented. "The big question now is not whether accountable care organizations are the future, but who will control that future" (Werber Serafini, 6/26).

In other health industry news, "[a] new Congressional report calls on medical journals, medical schools and even the National Institutes of Health to take additional measures to ensure the integrity of the scientific articles many doctors rely on to make treatment decisions for their patients," according to The New York Times. Sen. Chuck Grassley, R-Iowa, issued the report on Thursday. It focuses on medical ghostwriting, where researchers sign on as authors to articles developed by "third-party medical education companies at the behest of drug or medical device makers." 

"'Manipulation of medical literature could lead physicians to prescribe drugs that are more costly or may even harm patients,' the report said. Over the last few years, industry documents made public in government investigations and product liability lawsuits against drug makers have shown medical ghostwriting to be widespread" (Singer, 6/24).