Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Doctors, hospitals fight health insurer mergers

Reprints

Associations representing doctors and hospitals say consolidating four of the five largest publicly traded U.S. health insurers would reduce competition in dozens of states and possibly increase prices.

An analysis of the proposed mergers of Anthem Inc. and Cigna Inc. and Aetna Inc. and Humana Inc. released this week by the American Medical Association indicates that the deals would stifle competition and potentially drive higher insurance prices in 154 cities in 23 states.

“A lack of competition in health insurer markets is not in the best interests of patients or physicians,” AMA President Steven J. Stack said Tuesday in a statement. “If a health insurer merger is likely to erode competition, employers and patients may be charged higher-than-competitive premiums, and physicians may be pressured to accept unfair terms that undermine their role as patient advocates and their ability to provide high-quality care.”

The American Hospital Association reached similar conclusions about the deals in reports sent to the U.S. Justice Department and Federal Trade Commission.

In one report, the AHA said Anthem's proposed $54 billion purchase of Cigna would threaten competition in as many as 817 geographic markets, including cities and rural counties. A second Sept. 1 report warned that the proposed $37 billion merger of Aetna and Humana would result in a single entity dominating the Medicare Advantage market in more than 1,038 counties in 38 states.

Both groups' analyses were conducted according to the Herfindahl-Hirschman Index, the standard by which federal antitrust regulators evaluate the resulting market concentration of potential mergers.

“What these reports are trying to do is make public something that I'm sure the Justice Department and the FTC have already done,” said Rob Fuller, of counsel at Los Angeles-based law firm Nelson Hardiman L.L.P. “They're making it known that it's not just a political point, but that there is legitimate economic justification for true analytic consideration of these mergers and whether they're ultimately good or bad for the marketplace.”

Mr. Fuller said the reports are hardly surprising, given the combined health insurers' increased leverage over providers in pricing negotiations.

“I certainly support the idea that this is not going to be good for hospitals and doctors,” Mr. Fuller said. “Over time, I think insurance companies are going to lose the need for innovative solutions, and I don't think the insurance companies are going to pass any savings on to consumers or employers.”

“Not that they should or that they have to, since they're for-profit companies and they're trying to make profits for their shareholders,” Mr. Fuller added. “As a shareholder I would applaud that, but as a consumer I'm not so sure.”

Read Next

  • Health care consolidation hearings likely to include ACA blame game

    Two massive health insurance mergers in the works have reignited a fiery discussion over excessive consolidation, and a series of congressional hearings kicking off this week will look for villains: hospitals, doctors, insurers or, more broadly, the Affordable Care Act.