The Wrath of the Titans Falls on Physicians and Consumers

October 2015

By Jacob Vugrinac, Director of Business Development, Stark Medical Auditing / Vachette Pathology


The recent mergers of four health insurance giants are leaving some doctors nervous. Their worry is certainly merited, as a handful of powerful companies are positioning themselves to be the titans of the healthcare industry.

The titans' namesakes in Greek mythology were giant deities of incredible strength who ruled with absolute power and an iron fist. This was good for the titans, but didn't work out so well for the people of Earth; this seems to be an eerily similar path we are heading down.

For the last few years, we have seen a trend of consolidation among healthcare providers - hospitals merging, hospitals buying or partnering with doctors, and physician practices consolidating. We have also seen a parallel unification among health insurers, but on a much larger scale. We now find ourselves with a market dominated by five, soon to be three, national players: United Healthcare, Anthem, Aetna, Humana and Cigna.

Hospitals merged, which led to the health insurers getting larger and more powerful to counter the hospitals' size and strength. With the health insurers' most recent play at market domination, doctors have even more reason to put themselves into bigger systems of care, and hospitals have even more reason to consolidate.

And so it goes until the dust settles and a single payer is left victorious.

Would these mergers make the healthcare system more competitive? Would they lower costs? Would they encourage innovation? If you answered yes to any of these questions, I have some snake oil I think you might be interested in buying.

These mergers will have a sweepingly negative effect on the accessibility and affordability of health insurance for millions of consumers. Bigger insurers will have more clout and pull, and I assure you they will not be afraid to throw their weight around. They could (read: will) raise premiums and reduce the number of doctors and hospitals that are part of network coverage plans.

Three players with all of the power means, more often than not, increased leverage and unfair power over the negotiation of rates with hospitals and providers.

So where does all of this merging leave physicians? It leaves them in a place with little margin for error.

With the three "titans" using their might and influence to negotiate rates to their liking, it is imperative that physicians know the true cost of the services they render. Without knowing their margin per procedure, physicians will be unable to combat the lower prices and demands of the new healthcare climate.

Physicians must be ever-vigilant in the relentless improvement and efficiency of the business of practice. If there are going to be lower fees, then it is imperative that there be no money left on the table. A practice's billing and collections must be constantly evolving and improving to combat the perils and pitfalls of the ever-changing economic landscape.

It is then and only then that physicians will be able to survive and thrive in the land of the titans.



Jacob Vugrinac is the Director of Business Development at Vachette Pathology and Stark Medical Auditing. He can be reached for comment at [email protected] or 517-486-4262.