Midweek update

A pending matter of interest for 2016 is the pending mergers between two sets of major health insurers — Aetna and Humana on the one hand and Anthem and Cigna on the other.  Business Insurance reports that the stockholders of the four companies have approved the respective merger agreements. Nevertheless, either agreement could be derailed by federal and state regulators conducting anti-trust reviews.

This “isn’t just a ballgame” for the [U.S.] Justice Department, explained David Balto, a Washington-based antitrust lawyer and former policy director for the Federal Trade Commission. State insurance commissioners will be reviewing the mergers and will likely take a “tough stance,” Mr. Balto said. ***  Most sources said it’s unclear what the Justice Department will decide to do. It is likely to be a long negotiation process, and if negotiations fall apart, the health insurers may go to court with the department to force a decision or they could call the deals off.

The FEHBlog ran across two article which illustrate the impact that Medicare has on healthcare:

  • The New York Time Upshot discusses how a change to Medicare’s reimbursement policy for inpatient confinements, which occurred 30 years ago, has reduced hospital stays, a factor which contributed to to the hospital readmission problem.  
  • A contributor to the Hill explains why giving Medicare the power to purchase prescription drugs is a bad idea. The same considerations apply to OPM’s idea to assume control over FEHBP prescription drug benefits. 
And in an interesting twist, Modern Healthcare reports that

Healthspan, the [Ohio-based] insurance arm of Catholic health system Mercy Health [and an FEHBP carrier], is getting rid of its medical group and halting sales of Affordable Care Act policies just two years after acquiring Kaiser Permanente’s Ohio subsidiary

The move represents a failure of one health system trying to replicate the much-heralded Kaiser model of healthcare, which integrates the payment and delivery sides. HealthSpan has been severely hurting the finances of Mercy Health, and executives felt they had to address “the operational challenges,” according to recent financial documents. 

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