With little room left to grow in their core businesses, and trustbusters blocking attempts to buy direct rivals, the [payer] oligopolists have been expanding into other bits of the health-care supply chain [by buying providers]. Besides adding to the top line, such vertical integration is juicing margins. The Affordable Care Act of 2010 limited the profits of health insurers to between 15% and 20% of collected premiums, depending on the size of the health plan. But it imposed no restrictions on what physicians or other intermediaries can earn. The law created an incentive for insurers to buy clinics, pharmacies and the like, and to steer customers to them rather than rival providers. The strategy channels revenue from the profit-capped insurance business to uncapped subsidiaries, which in theory could let insurers keep more of the premiums paid by patients.
The payers probably figured this out by reading Chapter 23 on "regulatory avoidance."
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