About 70 percent of U.S. metropolitan areas lack sufficient competition among insurers, according to a report by The American Medical Association.
The Dallas and Fort Worth metropolitan areas are not among them.
The AMA analyzed 385 metropolitan statistical areas (MSAs) and defined “highly concentrated” insurance markets as having a Herfindahl-Hirschman Index (HHI) score greater than 2500. The index, named after two economists, is widely used in competition and antitrust law.
Dallas-Plano-Irving had an HHI of 2300; Fort Worth-Arlington was 2040.
According to the report, 89 percent of MSAs had at least one insurer with a commercial market share of at least 30 percent. In the Fort Worth MSA, market leader Aetna had a 26 percent market share. In the Dallas MSA, Blue Cross Blue Shield (BCBS) of Texas had a 29 percent market share.
Insurer market share was much more concentrated for individual products. Aetna has a 75 percent health maintenance organization market share in Fort Worth and is twice as big as WellPoint in Dallas at 47 percent of the market.
BCBS dominates the preferred provider organization market at 36 percent in Fort Worth and 45 percent in Dallas. UnitedHealthcare has two-thirds market share in both metro areas for point-of-service products.
The AMA has long contended that insurer market power in a given metropolitan area results in higher prices for consumers and below-market payments to healthcare providers.
On the other hand, insurers argue that provider consolidation is fueling healthcare inflation. In a statement, America’s Health Insurance Plans called the study “fatally flawed” and said the annual report “has consistently been debunked by leading healthcare economists.”
Steve Jacob is editor of D Healthcare Daily and author of Health Care in 2020: Where Uncertain Reform, Bad Habits, Too Few Doctors and Skyrocketing Costs Are Taking Us. He can be reached at [email protected].
