I read with amusement a recent post from Fierce Health Payer entitled Harness the power of scale to cut costs, improve outcomes, authored by Harold M. Paz, MD, Aetna's Chief Medical Officer. The author is apparently trying to justify the pending merger with Humana. The article opens with the following altruistic message:
While there are many viewpoints on the best way to fix our health care system, we can agree that a better system means bringing the best practices of medicine to as many patients as possible. The thousands of doctors and nurses that work at health insurance companies nationwide are in a unique position to help achieve this goal. We can work together with health care providers to innovate and improve care, then share what works across a wide range of settings to positively influence care at a broader level. We can also help address gaps in care, particularly for seniors and those with chronic conditions.
A better explanation would be that oligopolists like Aetna seek to gobble up markets, often times via merger and acquisition. Upon achieving market power, the firm can compress costs (in this case, largely reimbursements to providers) via scale and strong-arm negotiation tactics. Meanwhile revenues increase exponentially as the firm gains more customers and can dictate price (in this case, health premiums paid by citizens and employers). Eventually, concerned regulators come along to address the abuse. Op-eds like this piece are obvious PR attempts to sway public opinion. Then the firm's lobbyists will cozy up to politicians and government enforcers to mitigate their intervention.