February 11, 2013 “Intelligence:  Late Breaking Lab News”

Would it surprise you to learn that just five organizations control 91% of California’s health insurance market? At the top of the list is Kaiser Permanente, which holds a 40% share of the California market. Following, in order, were Anthem Blue Cross (23%), Blue Shield of California (14%), Health Net (9%), and UnitedHealth Group (5%). The numbers were compiled and published in a report issued by CitiGroup Financial Analyst Carl McDonald. He used nationwide data on 2011 premiums and enrollment for large and small employers, as well as for individuals buying their own policies.

MORE ON: Health Insurance Market

This concentration of the nation’s largest market for health insurance shows the consequences of two decades of consolidation within the health insurance industry. It demonstrates why the top five managed care organizations in the Golden State have ample clout to negotiate low prices for clinical laboratory testing.

LIFELABS TO BUY BC BIOMEDICAL

In British Columbia last month, LifeLabs announced that it would acquire B.C. Biomedical Laboratories. Once the sale is closed, LifeLabs will hold a 90% market share of the lab testing done on non-hospital patients in British Columbia. Private laboratory providers in British Columbia have often been the target of criticism because of their status as for-profit companies. The sale likely allows the physician group that owns B.C. Biomedical Labs to exit the market before further lab test price cuts by the provincial health system erode the market value of their lab company.

ADD TO: LifeLabs

There is some irony to this development. Following the announcement of the merger agreement, provincial health officials expressed concerns about the consequences of the near-monopoly that would result after the merger. These concerns included whether lab test fees might increase, as well as reduced patient access if LifeLabs were to eliminate redundant lab testing facilities and patient service centers. “Right now patients in British Columbia have very good access—probably quite a bit better than some of the other provinces,” stated Margaret MacDiarmid, B.C. Health Minister, after notifying Canada’s federal Competition Bureau to “closely examine the potential impacts of the deal.”

Dark Daily Update

dark_daily_logoHave you caught the latest e-briefings from DARK Daily? If so, then you’d know about…

…the death of a boy from sepsis following an ED visit last spring where the physician discharged the patient with- out checking test results. That led New York state officials to implement tighter requirements for handling patients suspected of having sepsis.

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