By Joe Ingemi

There is much debate concerning S3218/A5119 and the restructuring of Horizon Blue Cross-Blue Shield of NJ. Much of the concern is built around whether Horizon will continue as a non-profit and what will happen to the roughly $7 billion in assets the Horizon controls. These are legitimate concerns but not the most important in terms of impact. The restructuring has the potential to negatively impact healthcare in New Jersey for years to come.

There are items in the proposed restructuring that are beneficial. Horizon will provide payment to the state of New Jersey, which can greatly benefit state healthcare programs (if the money is spent towards its intended purposes). Horizon also will become a mutual company, where earnings are shared with policy holders. However, the issue is what Horizon intends to do with that mutual company.

Horizon intends to move beyond health insurance by investing in other healthcare business lines. Horizon has the economic power to leverage its position as the dominant insurer in the state, to dominate other areas of healthcare. Such dominance will eliminate competition, squeeze hospitals and providers, and limit choice and care for patients with the ultimate result of increased consolidation of providers as well as any contractor or other entity in the healthcare supply chain.

This dominance would be reinforced by Horizon’s access to large troves of data further entrenching Horizon’s dominance and potential for abuse. For example, a Horizon conglomerate could create a data analytics firm based on insurance reimbursement information. Horizon could expand its data collection and surveillance by offering incentives through its insurance company to providers that utilize this data analytics firm. Such a data analytics firm could institute cuts to certain areas of care and offer further incentives to implement these cuts. This process would create tremendous pressure on providers who made cuts to simply consolidate. The result will be fewer jobs, fewer choices, and lower quality care for patients.

The focus of a conglomerate necessarily evolves away from the mission established for each component and resettles on the abstraction of the financial performance. Horizon could become more concerned with buying, growing, and selling its subsidiaries. Effectively, Horizon will become a financial company rather than a healthcare company, more focused on cutting deals than patient care.

This problem is neither unique to Horizon nor New Jersey. The erosion of antitrust and regulation of monopolies has been a problem since the 1970s. The United States has seen the impact: regional inequality, wage stagnation, and the undermining of small businesses. However, we also have seen a reawakening on the need for antitrust on a bipartisan basis. The House Judiciary Committee led an investigation into abusive practices of tech giants. DOJ and state attorney generals have filed an antitrust suit against Google. The FTC and state attorney generals have taken similar action against Facebook. Our own Senator, Cory Booker, has sponsored legislation to address agribusiness monopolies.

Now, the issue is before the state legislature. They now have the opportunity to do their part in putting people before corporate interests. They should oppose S3218/A5119 and protect the health and welfare of the residents of NJ.

Joseph Ingemi is technology consultant and adjunct professor. He resides in Hammonton, NJ.