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By Monica E. Oss

“When elephants fight, it’s the grass that suffers”

As we completed our recent analysis of the largest Medicaid insurers, it brought to mind the proverb; “when elephants fight, it’s the grass that suffers.” Why? The top-five Medicaid insurers are increasing their market share and are likely to continue to increase that market share. And on top of that, we are seeing non-traditional mergers and acquisitions, which are likely to have a profound effect on how health care is delivered.

First, who are the top-five largest Medicaid insurers? Centene, UnitedHealthcare, Anthem, WellCare, and Molina Healthcare (in that order). These insurers serve approximately 25.8 million individuals and represent 47% of the population enrolled in Medicaid managed care. In between 2017 and 2018, these insurers saw a 4.2% increase in their market share. Centene had the largest increase in enrollment at 24% due to the acquisition of Fidelis Care, which had over 1.2 million members (see Centene Completes Transaction With Fidelis Care).

What sort of other activity have we seen over the past year among the five largest plans?

  1. Centene To Acquire Community Medical Group To Expand Its Provider Assets
  2. Centene To Acquire MHM Services, Expanding Correctional Health Care Reach
  3. OptumRx Acquires Genoa Healthcare
  4. UnitedHealth Bought Pharmacy Company Avella To Build Optum Unit
  5. UnitedHealth Acquiring Four Clinics Through Its Purchase Of Peoples Health
  6. UnitedHealth’s Optum To Acquire A Stake In The Polyclinic
    Sound Physicians Sold To Optum & An Investment Group Led By Summit Partners
  7. Optum To Acquire DaVita Medical Group For $4.9 Billion
  8. Anthem To Buy Aspire Health, A Community-Based Palliative Care Organization
  9. Anthem Acquires HealthSun
  10. WellCare Health Plans To Buy Meridian Health Plan For $2.5 Billion
  11. Aetna To Sell Medicare Prescription Drug Business To Wellcare
  12. Molina Healthcare Sells Pathways Health To Atar Capital

What does this mean for provider organization strategy? I think it goes back to the second half of the proverb—”the grass will suffer.” Specialty provider organizations both big and small are going to see increasing challenges to their market. Narrow networks, value-based reimbursement, acquisition of service capacity, and ACO partnerships are just a few of the continuing developments that are changing the role of specialists. As health plans get larger, individual provider organizations will have less bargaining power.

But there is no “magic bullet” strategy. The key is understand in each geographic market what health plans have the most market share—and what the specific pain points and opportunities are with each of those health plans (see Health Plan Relationship Building Skills Key To VBR Success, ‘Rapid Access’ Might Just Be Your Next Health Plan Conversation, and Fitting Specialty Care Into ACOs). For most specialist provider organizations, I see two different strategic directions—broad positioning embracing “whole person care” management within the delivery system or becoming a provider of very specific urgent and acute services (see Be Broad? Be Niche? How?, Health System/Insurer Combos Gain Steam-& More To Come With ACO Changes, What Does It Take To Outlast The Disruptors?, and The Path To Long-Term Sustainability).

To see who the largest insurers are, be sure to check out, our latest market intelligence report: The 2019 OPEN MINDS Medicaid Managed Care Market Share Report. The report contains a list of the insurers with more than 500,000 Medicaid enrollees, their actual enrollment and where they operate. The report also contains a listing of the top ten insurers compared to 2017 and their market share.

For even more, join us at The 2019 OPEN MINDS Performance Management Institute to learn how to contract with payers during the executive summit, “The OPEN MINDS Health Plan Partnership Summit: A Guide To Developing & Negotiating Partnership Agreements With Health Plans” led by Deb Adler, Senior Associate, OPEN MINDS & Former SVP Network Strategy, UnitedHealth Group/Optum and featuring: Beth Rath, PMP, Vice President Network Operations, New Directions; Matt Miller, Senior Vice President, Public Sector, Magellan Healthcare; Kelly J. Champ, Vice President, Network Strategy & Innovation, Optum; and Charles Gross, Ph.D., Vice President, Behavioral Health, Anthem, Inc.

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