In the Matter of St. Cloud Medical Group/ Centra Care Health, File No. 1610096 #00009

Submission Number:
Garrett Black
Blue Cross Blue Shield of Minnesota
Initiative Name:
In the Matter of St. Cloud Medical Group/ Centra Care Health, File No. 1610096
Blue Cross Blue Shield of Minnesota "BCBSMN" continues to be concerned with the ongoing trend of market consolidation in both regional and metropolitan areas within Minnesota. With the advent of value-based care and the movement towards risk based payment models for governmental and commercial health plan reimbursement, it is apparent providers feel that gaining scale or access to more advanced technology is a key element of succeeding in this new environment. It is BCBSMN's position that further consolidation is not the answer to solving the underlying health care cost issue we have in this country and Minnesota in particular. Our long history of seeing the aftermath of consolidation and provider acquisitions is that we generally see costs increase overall as a result from these mergers. In most industries, mergers and acquisitions generally do lead to lower prices through gaining scale of operating costs. In health care, there is a long history that consolidation does not result in cost savings from gained scale being passed onto members and patients but instead is used as leverage to negotiate higher rates. We believe it is paramount that choice remains within regional and metropolitan markets for health care services. Competition allows members to have choice and creates a healthy economic balance between providers, health plans, consumers and group customers. Without this, health care costs as a % of gross domestic product will continue to grow disproportionately without any material gain in quality outcomes. To truly improve the value provided to patients in health care over the long-term, we feel that we need to encourage an open market where patients and consumers can choose their health care provider based on cost and quality. Competition has long been a driver across different industries as a key catalyst to spurring innovation and maintaining low prices. Competition among traditional health care providers and competition from new entrants providing care in different ways is the environment that is needed to encourage innovation that improves service, improves quality outcomes, and effectively manages costs. Consolidation can alter this balance and may halt the innovation we are seeking. We are hopeful that we can continue to maintain the competitive balance that is vital to encourage a healthy competitive environment.