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“synergy savings.” 96 Looking past insurers’ public relations campaign, there are real threats to consumers stemming from these proposed insurance consolidations. One area of concern is threats to healthcare providers. As insurance consolidation sweeps through the healthcare industry, the already-limited bargaining power that individual physicians had with health insurers will inevitably diminish. 97 The number of independent physicians has dropped – sixty to seventy percent of all physicians are now employed by a hospital or system. 98 Increasing administrative and regulatory burdens make independent practice less viable. 99 Insurer consolidation can effectively end independent medical practices because smaller physician practices cannot compete with the large insurers. 100 This will likely force the small number of remaining independent providers to merge with larger systems. To counter the increased bargaining power of consolidated insurers, healthcare providers will seek further consolidation. 101 In addition to further driving provider consolidation, there is a real concern that insurance mergers will lead to a reduction in provider payments. 102 Studies demonstrate that in areas where there is an increase in insurance market concentration, hospital prices are generally lower. 103 The lower hospital prices put provider viability at stake because they are often at the mercy of those insurers with a great deal of market power. Both insurers and
96. Megan McArdle, No Wonder Insurers Want to Merge, BLOOMBERG VIEW (Jul. 24, 2015, 2:06 PM), http://www.bloombergview.com/articles/2015-07-24/no-wonder-insurers- want-to-merge. 97. Walker Ray & Tim Norbeck, When It Comes to Health Insurance Mergers, Bigger is Not Going to Be Better, FORBES (Sept. 28, 2015, 1: 32 PM), http://www.forbes.com/ sites/physiciansfoundation/2015/09/28/bigger-is-not-going-to-be-better/#79e82cf1603a. 98. Marion Callahan & Marissa Shoemaker Debree, Doctors Look for New Ways to Cope with Health Care Changes, WASH. TIMES (Sept. 25, 2015), http://www.washingtontimes.com/ news/2015/sep/5/doctors-look-for-new-ways-to-cope-with-health-care/?page=all. 99. Ken Terry et al., Top 15 Challenges Facing Physicians in 2015, MED. ECON. (Dec. 1, 2014), http://medicaleconomics.modernmedicine.com/medical-economics/news/top- 15-challenges-facing-physicians-2015?page=full (“For some physicians, joining a large hospital system offers a haven from the rising administrative burdens of staying independent and from competitive pressures that can drive a small practice into insolvency.”). 100. Scott Gottlieb, ObamaCare’s Threat to Private Practice, WALL STREET J. (Dec. 7, 2014, 5: 12 PM), http://www.wsj.com/articles/scott-gottlieb-obamacares-threat-to-private- practice-1417990367. 101. Herman, Potential Insurance Mergers, supra note 11. 102. Dafny, supra note 22; see Ray & Norbeck, supra note 97 (noting the 1999 merger between Aetna and Prudential “resulted in reduced payments to providers and no evidence that those cost savings were passed on to consumers”). 103. Dafny, supra note 22 (measuring the correlation between hospital prices and insurance consolidation with the Herfindahl-Hirschman index (HHI), which is “an imperfect proxy for true competitiveness (the degree to which firms vie to serve consumers through product design, price service, etc.”).