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MERGERS AMONG LARGE INSURERS LIKELY TO HAVE BIG IMPACT

By: Nicola Heredia, CHS Marketing Coordinator

In the last month, two of the nation’s major insurance providers have announced mergers with other companies. The latest news in the health care insurance industry has caused uncertainty in the marketplace about how doctors, hospitals and insurance enrollees will be affected.

By 2016, the top five insurance companies, which control approximately 32 percent of health insurance premium in the U.S. according to the National Association of Insurance Commissioners, will be whittled down to three.

Aetna publicized their multi-billion dollar deal with Humana in early July. This announcement seemed to set the stage for the Anthem – Cigna Corp. deal, which was a $54 billion acquisition.

“I think the devil ultimately will be in the details as to how the consolidation occurs and the degree to which insurers leverage the increase in scale to the benefit of clients as opposed to limiting competition amongst themselves,” said Mike Thompson, a principal and health care practice leader at PricewaterhouseCoopers L.L.P., in a Business Insurance article.

Aon Hewitt reported on a study they conducted with 100 employees that looked to gain insight on individuals’ thoughts of the mergers. 21 percent of respondents said they believe that the consolidation will help make progress towards better cost management. Additionally, 46 percent expect an impact in the number of plans available for them to pick from.

A decline in plan choices is one of the many concerns that have been vocalized since the rumors of the mergers first began. Consolidation may threaten to decrease competition, which could lead to plans becoming more expensive and doctors having less negotiating power with the insurance companies.

“Bigger insurance companies mean increased leverage and unfair power over negotiating rates with hospitals and physicians,” said the American Academy of Family Physicians in a statement. “More often than not, consolidation increases costs and reduces options for consumers.”

Due to the scrutiny that has followed the announcement of these mergers, many organizations have not only vocalized the criticism of the mergers, but some have even called for government review to ensure the acquisitions are not illegal.

“Given the troubling trends in the health insurance market, the AMA believe federal and state regulations must take a hard look at the proposed health insurer mergers,” said the American Medical Association, AMA, in a statement.

Regardless of whether the government reviews the multi-billion dollar mergers, changes are coming to the marketplace. Consolidating the major insurance plans from five to three will inherently have an effect on the marketplace.

“That’s what usually happens when you have less competition,” said Erin Trish, a researcher at USC’s Schaeffer Center for Health Policy and Economics, in a LA Times’ article. “At the same time, though, consolidation among insurers could mean a strong position in negotiating lowers rates with hospitals.”

Experts predict that insurance plans may become more aggressive when developing their rates with hospitals and providers within their network. If this is the case, it remains to be seen if insurers will keep the cost savings to themselves or pass it along to members of their plans.

The health insurance mergers have thrown the industry for a loop as various entities attempt to predict and prepare for changes to come. As the details of the acquisition continue to play out, the industry awaits the changes to come.

MEAL PORTIONS DECREASING, UNHEALTHY HABITS STILL LINGER

By: Nicola Heredia, CHS Marketing Coordinator

In the last ten years, there has been a big emphasis placed on combating the obesity crisis that faces the U.S. Many factors have contributed to the growing waistline of Americans, and efforts to make people aware of what they are ingesting seem to be working.

Regulations have been set in place by the federal government requiring restaurants to publicize their nutritional information and calorie content for their dishes. Other standards have changed such as regulating student lunches by making them overall healthier and more nutritional. 

“I think people are hearing the message, and diet is slowly improving,” said Dr. Dariush Mozaffarian, the dean of the Friedman School of Nutrition Science and Poly at Tufts University, in a CNN article.

After peaking in 2003, a study reports that Americans calorie intact has reduced by 9 percent since then, according to a New York Times’ article. The biggest shift appears to be in the amount of full-calorie soda that is being consumed with a decline of 25 percent since the late 1990s.

“I think the attitude more and more in this country is that it’s not a good idea to consume a lot of soda,” said Dr. Satcher, professor at Morehouse School of Medicine in Atlanta, in the New York Times’ article.

The combination of new regulations and Americans increase in awareness of what is healthy has led to a halt in obesity rates among adults and children. While that is encouraging data, CDC reports show that one in three adults are considered to be obese, which is still a problem that needs to be addressed.

Although individuals are making positive progress when it comes to their diet and food choices, there is still room for improvement.

“There has not been a big enough change in sugar-sweetened beverages and refined carbohydrates and fast foods, and there has not been an increase in the healthy foods,” said Barry Popkin, professor at University of North Carolina, in a CNN article. “We have slightly cut our calories but we still consume over half our calories from the wrong foods.”

Portions may be smaller than in the past, but experts believe that the calories being consumed are not necessarily filled with the proper nutrition. Incorporating more fruits and vegetables and eliminating empty carbohydrates is the next step to continue the evolution of the American diet.

While there may be a small increase in the levels of fruit and vegetables being consumed, there has been basically no difference seen when it comes to fast food. Additionally, while more people tend to be eating at home, there is a concern that just because it is a home meal does not necessarily qualify it as healthy.

“Unfortunately, eating at home is all too often putting something in the microwave” that has a lot of calories and sodium, said Dr. Walter Willett, professor of nutrition and epidemiology at Harvard T.H. Chan School of Public Health, in a CNN article.

Similar to the slow pace that the decline of smoking occurred, experts believe that Americans’ diet is a work in progress. The positive data shows that there is a shift to healthier alternatives. Although there is still a lot of room to grow, it a good place to start.

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