What’s the Breakout of Small vs Large Health Insurance Plans?

It never ceases to amaze me how our perceptions of how large something is can be skewed. It’s easy for us to see a really large company and assume that it must have the majority of the market share. This perception might be even more skewed because of companies like Google, Amazon, and Microsoft which really do have the majority of the market.

It’s a well-known idea in the tech startup world that the big winner will win the majority of the market, a second company will own most of the rest and then a long tail of others will have a small share and then eventually disappear. A great modern example of this is Uber followed by Lyft and then everyone else.

While this is an interesting way to look at a market when investing in tech companies, I’m surprised how often it doesn’t play out the same way in healthcare. The first time I saw this was in the lab market. Everyone knows that the 2 dominant players in the lab market are LabCorp and Quest. While they are both large companies, they still don’t have even close to a majority of the lab market. There are so many other independent labs and every hospital and health system has their own labs as well.

While looking at a recent report on the SMB Health Insurance Market by edifecs, I saw the same situation in the health insurance market. We all know about the massive health insurance companies that dominate the headlines. However, this report highlights the number of small and medium sized health plans out there. It was also interesting to note how these small plans are more concentrated in certain states.

If you don’t want to read the full report, this infographic summarizes a number of the stats and findings:

Is this result surprising to you? What does this mean for healthcare? Is there an opportunity for these small to medium size health plans to disrupt healthcare? Will we see more small plans chipping away at the large health plans?

About the author

John Lynn

John Lynn

John Lynn is the Founder of the HealthcareScene.com, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference, EXPO.health, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.

   

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