Insurers' Profits

Insurers and Pain Care

Feb 11 2010 12:00AM
For reasons that a good investigative reporter could ferret out, as of January 1st all the major insurers began to deny paying for pain medications and started requiring burdensome and tortuous "prior authorizations" (even though many patients had long ago obtained these authorizations. It is clear that some form of collusion has occurred (recall that insurance companies are uniquely exempt from anti-trust prosecution)in which all insurers agreed to do this simultaneously. Meanwhile, today's news reports that the top 10 insurers enjoyed record profits in 2009.

This collusion is one example of probably why. Meanwhile, their profitability is well established (see below). As I have written extensively, there is an irresolvable conflict of interest between insurance companies and health care. Insurance companies are all about making money. Health care is about taking care of people. Insurance companies pursue their profits by seeking ways to NOT take care of people.

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Health Insurance Profits Soar as Industry Mergers Create Near-Monopoly
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by Mike Hall, May 27, 2009

Profits at 10 of the country's largest publicly traded health insurance companies rose 428 percent from 2000 to 2007, while consumers paid more for less coverage. One of the major reasons, according to a new study, is the growing lack of competition in the private health insurance industry that has led to near monopoly conditions in many markets.

The report says such conditions warrant a Justice Department investigation and, says Sen. Charles Schumer (D-N.Y.), provide compelling evidence of the need for a public health insurance plan option as part of the health care reform initiative President Obama and Congress are developing.

Schumer says the report from Health Care for America Now! (HCAN)

is the starkest evidence yet that the private health care insurance market is in bad need of some healthy competition. A public health insurance option is critical to ensure the greatest amount of choice possible for consumers.

According to the recently released HCAN report, Premiums Soaring in Consolidated Health Insurance Market:

In the past 13 years, more than 400 corporate mergers have involved health insurers, and a small number of companies now dominate local markets but haven't delivered on promises of increased efficiency. According to the American Medical Association, 94 percent of insurance markets in the United States are now highly concentrated, and insurers are thriving in the anti-competitive marketplace, raking in enormous profits and paying out huge CEO salaries.

These mergers and consolidations have created a marketplace where a small number of larger companies use their power to raise premiums an average of 87 percent over the past six years restrict and reduce benefit packages and control and cut provider payments.

In a letter to the Department of Justice's Anti-Trust Division, Richard Kirsch, HCAN national campaign manager, and David Balto, former policy director of the Federal Trade Commission and now senior fellow at the Center for American Progress, write:

Simply put, the private insurance companies have secured monopolies or tight oligopolies and exercised that power to put profits ahead of patients. There were no actions taken against anticompetitive conduct by health insurers in the last administration, in spite of the fact that cases by state attorneys general have secured massive fines against these insurers. A lack of antitrust enforcement has enabled insurers to acquire dominant positions in almost every metropolitan market.

They ask for an investigation of the already consummated mergers that harm competition or create an anticompetitive market structure. They also urge the Justice Department to conduct investigations of anticompetitive conduct by dominant insurance companies and challenge that conduct where appropriate.

Many dominant insurers limit the ability of providers to choose rival insurers or inform patients about more efficient and comprehensive coverage.

Obama budget aned th e"War on Drugs"

The Obama administration released its Fiscal Year 2011 budget proposal this week, including the federal drug control budget. On the drug budget, the Obama administration is generally following the same course as the Bush administration and appears to be flying on autopilot
.http://stopthedrugwar.org/chronicle/619/2011_federal_drug_budget