The American Medical Association (AMA) recently released its 2010 edition of Competition in Health Insurance: A Comprehensive Study of U.S. Markets. The study claims that 99 percent of U.S. health insurance markets are “highly concentrated,” including Tennessee and that the dominate player across the state is BlueCross.

According to the study this lack of competition places physicians and consumers at a disadvantage. Those disadvantages range from restrictive insurer policies that affect the physician’s role as a patient advocate, to higher premiums for consumers.

Market Competition Reality

• The AMA concentration study makes unfounded assertions in an attempt to deflect attention away from the real drivers of insurance premium increases: the rising costs and use of medical services.

• There are more than a dozen health insurance carriers licensed in Tennessee. On average, most physician offices contract with more than 10 insurers.

• Most businesses make a choice annually on the health insurance carrier they use and that means we have to compete every year to keep customers’ business.

• The market share we have is what we have won through competition, based on the value and service we provide to customers.

• Since the passage of health care reform, we have seen an increase in the number of large rate increase requests by physicians and other medical providers. While insurance rates are regulated, physicians’ are not.

• As an advocate for our customers, we play an important role in helping to curb the rise in medical costs.

• Our medical cost trend, or the rate of increase, is significantly better than our competitors. We make no apology for working to keep medical costs down. This is what our customers expect and demand from us.

• If our members want to know what medical care could have cost them, they have a simple reference point: our explanation of benefits. They can see what providers charge and what we pay. The difference is the discount we deliver to them and it is reflected in what they pay for their coverage.

• We have been the driving force for quality and cost transparency information on physicians in Tennessee. Transparency is something the AMA has only talked about.

Industry Response to Market Competition

"Concentration is not the same thing as competition. Just because one plan has a large market share does not mean that consumers do not have choice of plans. Some companies may have a large market share because they have been around a long time, they offer the most affordable options, or they have the highest satisfaction rates – that is the essence of competition. "

Robert Zirkelbach, Press Secretary for America’s Health Insurance Plans

Provider Consolidation

A study by the Robert Wood Johnson Foundation found no evidence that a health plan’s market concentration increased health costs. In fact, its research suggests that hospital consolidation has caused an increase in costs.

Premium Cost Drivers

The rising costs for medical services continue to drive premium dollars higher. At BlueCross BlueShield of Tennessee we work hard to keep premiums as affordable as possible and to ensure that the premiums our members pay are going toward the care they receive. In fact, we pay out nearly $46 million in claims each working day to the providers that deliver care.

About BlueCross

BlueCross BlueShield of Tennessee's mission is to provide its customers and communities with peace of mind through affordable solutions for health and healing, life and living. Founded in 1945, the Chattanooga-based company is focused on reinventing the health plan for its 3 million members in Tennessee and across the country. Through its integrated health management approach, BlueCross provides patient-centric products and services that drive health improvement and positively impact health care quality and value. BlueCross BlueShield of Tennessee Inc. is an independent licensee of the BlueCross BlueShield Association. For more information, visit the company's website at