The Company 's Joint Website Essay

“UnitedHealthcare provides network-based health care benefits for a full spectrum of customers in the health benefits market” such as students and individuals; sole proprietorships to multi-site, large national employers; promotion of health benefits to Medicare retirees and beneficiaries; and provides Medicaid and community programs (UnitedHealthcare, 2010). UnitedHealth Group 2012 revenue was $11.3 billion. The company is continuously growing through various mergers and acquisitions within the US and Europe, increasing members and revenues (Keepournhspublic, n. d.).

Despite the large number of funds, the market is an oligopoly, this is due to relatively concentrated top five funds accounting for 83% market share at Jun-13; this is shown in the graph below (JP Morgan, 2015). These five top funds include Medibank, BUPA, HCF, HBF and NIB. While there is a long-tail of smaller players, acquisition activity over the past five years has been relatively limited with only a handful of deals as shown below in the table below. This reflects the fact that smaller restricted and not-for-profit player have not been squeezed out due to being given the access to scale efficiencies through third-party collective bargaining groups (white label other insurance companies policies), technology as well as benefits from risk equalization. Large players such as BUPA and Medibank sought acquisitions (refer to table) and/or vertical integration to get scale, efficiencies and brand power. The large funds in addition are investing heavily in wellness benefits to enhance their brand proposition, and are shunning the online aggregators. Some of the medium sized insurers such as NHF, Australian Unity, and HCF are seeking to grow outside their home states, to maximize their potential

The short term decision to start in a limited area and then only grow by one state in 2015 may have served the purpose of limiting risk during a time of uncertainty, however, in the long term, penetrating into new markets may be difficult because individuals currently enrolled are automatically re-enrolled at the end of the period. For Aetna, it may be harder to pull a member from a plan that they currently have. The largest healthcare insurance company UnitedHealth was more conservative than Aetna in the first two years, with participating starting in five states in year one then increasing to 24 in year two. With the addition of UnitedHealth in the same markets as Aetna and the unknown risks associated with new enrollees for the 2015 plan year, the short term could be crucial for Aetna. If Aetna is able to add to 2014’s positive results, and increase membership in markets that UnitedHealth entered, it will go a long way toward their long term goals of increasing membership in the individual and small group sector (Demko, 2014).

In the hope of better coordinating the care of patients, improving quality and lowering costs, the ACA provides incentives for physicians and hospitals to work together in several ways, such as Accountable Care Organizations (ACO’s) or establishing bundled payments for episodes of care (Martin Gaynor, 2012 ) which has spurred consolidation (Becker, Gamble, & Rosin, 2015). Additionally, compliance with various federal programs such as Meaningful Use requires a significant investment in technology which can be fiscally challenging for smaller provider groups; driving acquisitions of these smaller entities by larger health systems. Other reasons cited by hospital administrators in the pursuit of consolidation is to ensure a steady stream of physician referrals (NPR, 2010), and to create economies of scale and increased efficiencies, the fruits of which result in reduced costs and therefore cheaper care for patients (ProMarket Writers, 2016). However, what most hospital

The second invention of Obama Care was the consolidation of hospital systems of epic proportions; they would be able to market their risk-bearing health insurance directly to patients.(Gottlieb, 2015, para. 7) During all these

Regulations that prevent insurance companies from participating in interstate commerce have caused competition to grow stagnant in the United States. This lack of competition has allowed the adoption of wasteful procedures by healthcare providers, which in turn passes the increased expenses back to the insurance companies. Therein, insurance costs increase, crippling consumer’s cash flow and quality of life. While healthcare costs continue to rise, people must scrutinize the current healthcare system.

While there has been large media coverage about the insurance impacts of the Affordable Care Act (ACA), there has been a smaller amount discussed of the law’s changes to provider reimbursement policy, reforms to the delivery system, and investments in programs to improve the quality of care and constrain long-run growth in health care costs. And yet, the elements included in the ACA directed at cost and quality is possible to affect the practice of care for nearly every provider across the country. Although cost containment policies and initiatives are largely applied through federal health programs which including Medicare and Medicaid; cost containment in these programs has important cost-saving spillover effects to private health care markets through changes in health care practices and pricing across sectors of care.

Uncontrollable skyrocketing health care costs not only effect our economy but every American pocket book. The Obamacare Act was the most important healthcare reform enacted since Medicare/Medicaid was created in 1965 (Jama, 2016). The Affordable Care Act has made a substantial progress in solving the challenges U.S healthcare faced for decades. The uninsured rate was dropped from 16.0% in 2010 to 9.0% in 2015 (Jama, 2016). Not only has the ACA delivered an access to quality

Health insurance and the affordable care act is a major topic in the United States today. This being said, there are many questions that run through one’s mind when the topic is discussed. Questions such as, what exactly is health insurance? What is the Aetna-Humana merge, and how beneficial is it? Should healthy citizens help pay for citizens with prior known health issues? Should people with preexisting conditions even have the option to purchase insurance to help cover medical cost? Although the Affordable Care Act has been in effect for a few years now, there are still some problems today the health insurers face because of this law.

This is because the Affordable Care Act is transforming how firms operate. This has resulted in the system facing unprecedented challenges. Many of these issues are based upon how to implement them in compliance with existing regulations (i.e. shared responsibility). Under these guidelines, the federal government will provide assistance to the states through Medicare to help extend coverage to the poor and middle class. These individuals will qualify for lower insurance premiums and greater choices in plans / providers. This is challenging, as HCA must be able to adapt and evolve with the issues it is facing in these environments. ("HCA Holdings," 2014) (Standard and Poor's,

The health care debate has been a tricky one over the years with legislators ongoing decision on whether rules should be put in place that would even out the playing field between regular folk and health insurance companies. Obtaining affordable health care has been difficult for many and has raised some eyebrows about how these health care companies continue to make billions of dollars a year while people’s health continue to suffer. In 2010, a health care reform, the Affordable Care Act or “Obamacare”, was signed into law which eliminated those obstacles and limitations set forth by the healthcare industry.

Anthem Inc, a leading health insurance company that provides health insurance for personal, business and government entities across the States. Anthem is a prosperous company, ranking within the Fortune 50 list, with total assets equaling $61.7 Billion. They have over 52,000 associates to serve over 39.8 million members. The company has presence in 14 States and continues to offer its services in growing markets (“Stats and Facts”).

Less than two months apart a pair of mergers involving four of America’s top five largest for-profit health insurance companies: Aetna Inc. and Humana Inc., Cigna Corp. and Anthem, have signaled a major shift in the nation’s health care marketplace. The federal government, formerly just a regulator of health insurance companies, has become one of their most important customers through public financing of health plans provided by private insurers. The pressure is on for health insurance companies to acquire smaller companies or be bought out by a larger company to lower costs and maximize profits. Should the government allow the health insurance system to be dominated by two or three enormous for profit companies?

As a leading insurance company, Aetna’s primary market broadens to reach those who work full time or part time based on hourly wages through its subsidiary company, Strategic Resource Company (SRC) which was bought by Aetna, Inc in 2005 (SRC: Our Mission, 2012). Aetna’s fourth subdivision target market, which is considered the biggest subdivision, is providing insurance to “employers, third-party administrators, commercial insurance companies and other health plans (Aetna Subsidiaries, 2012)”. These latter targets are aimed at through Aetna’s fourth subsidiary Cofinity which includes over 2.5 million members as of 2009 (About Cofinity, 2009). Besides targeting health insurance consumers, Aetna aimed at a target market that excludes health insurance seekers yet includes health care providers. Through a fifth subsidiary, Medicity, Aetna created another target market subdivision where it can provide health information technology in health care facilities such as hospitals and practices (About Medicity, 2012). Finally, Aetna aims at acquiring shareholders and therefore targeted a market of

”Medicaid and Medicare, which together insured 30 percent of the population in 2009, use their market power to pay some of the lowest reimbursement rates to doctors and hospitals. Because of their large market share, managed care organizations (MCOs) similarly have more bargaining power than an individual employer” (Stone, 2013, para. 2). Large employers, health plans and managed care organizations then use price incentives through good benefit design to drive patients to lower cost facilities. Traditionally, larger employers and payers had a competitive advantage in negotiating substantial discounts from hospitals because they could drive more market share (Sorensen, 2003). However, smaller employers formed cooperatives to gain bargaining power in the marketplace in order to gain the deeper discounts afforded to groups with larger numbers of employees.