NCPA - National Center for Policy Analysis

Larger Managed Care Companies Can Benefit Patients

December 17, 1998

Analysts anticipate criticism of the proposed purchase of Prudential Insurance Company's health care business by Aetna Inc. Self-styled patients' advocates will protest the organization's substantial increase in size. But some health-care specialist say the larger organization could work to the consumer's advantage.

Aetna's new heft would give it only 10 percent of the nation's health-care market, although up to 30 percent in some regional markets -- which are not formidable numbers.

Here are some of the points health care economists make:

  • Large plans will have a decisive advantage as insurance companies spend the next decade evaluating the quality of patient care.
  • Tight oversight of patient care requires expensive computer systems only large insurance companies can afford -- and Aetna is creating such systems.
  • Using its massive patient data bases, Aetna already distributes reports to each of its physicians once or twice a year -- telling them how their treatment of several prominent medical problems compares with that of their peers.
  • The company contends that doctors are responding to its reports by slowly bringing their treatment practices in line with recommendations by major medical societies.

Such advances in treatment would not be possible if costs could not be spread over a huge patient-base. Also, massive investments are needed to purchase gigantic computer systems and constantly upgrade data on patients.

Source: Michael M. Weinstein, "In the Health Care Business, Size Can Ultimately Benefit Patients," New York Times, December 17, 1998.


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