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Health Care

Anthem Inc. (NYSE:ANTMB) is only one of several health benefits companies facing uncertainty as Congress debates new health care legislation.

As a result of the uncertainty Anthem said recently it would withdraw from the Ohio insurance marketplace making it the latest company to totally withdraw from a state or region.


Federal Payments At Risk

Anthem says its decision to withdraw from Ohio is a reaction to a very volatile market and uncertainty surrounding federal payments to insurers that make it possible for low-income customers to obtain reasonably-priced coverage.

The Trump administration has threatened to stop these federal payments as part of its promise to overturn the Affordable Care Act and replace it with a new plan. Insurers like Anthem, understandably, want to know where they stand since they believe they need these federal reimbursements in order to remain profitable.

Litigation Adds To Woes For Anthem

In addition to unanswered questions about the ACA, Anthem is also locked in litigation with Cigna Corp. (NYSE:CIA) over a planned merger deal that was terminated after being blocked by the courts on antitrust grounds.

Anthem is also suing Express Scripts Holding Co. (NASDAQ:ESRXC), claiming Express Scripts violated a contract with Anthem. Express Scripts has said it considers the suit ‘without merit.’

The Role Of Big Data

While all this is going on, Anthem, like others in health care, is attempting to transition from fee-for-service to value-based care. To accomplish this Anthem is hoping to leverage data and information technology to provide better support for new reimbursement models.

According to Joseph Swedish, Anthem CEO, “Last year, Anthem processed 730 million claims, an enormous amount of data creating 17 petabytes of health information—information about our members that we believe we can put to good use with respect to evaluating the full spectrum of services that we offer.”

Simply put Anthem hopes the billions of pieces of information it has will help it provide, in Swedish’s words, “meaningful support to our physician community going forward.”


The Tip Of The Iceberg

According to a report published by consulting firm PricewaterhouseCoopers (PwC) at the end of last year, health care in the U.S. faces a number of major issues in 2017. These issues affect, not only Anthem, but all major providers including Aetna Inc. (NYSE:AETC), Humana Inc. (NYSE:HUMC), United Health Group (NYSE:UNHB) and others.

In addition to the previously mentioned uncertainty regarding the ACA, federal cost-sharing reimbursements and value-based payments, issues include mandated patient engagement including an increased role of pharma in the process, a need to update credit card processing systems and dealing with the growth of emerging technologies such as the use of drones, AI and virtual reality, to name just a few.

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