AMA asks Justice Department to block Aetna-Humana, Anthem-Cigna mergers

Washington – Saying it would end competition in key markets and erode patient care, the American Medical Association has asked the Justice Department to quash the proposed mergers between insurance giants Aetna and Humana and Anthem and Cigna.

The AMA has been increasingly critical of the mergers and had asked the Justice Department to review them carefully.  But in a 17-page letter sent Wednesday to William Baer, assistant attorney general of the Justice Department’s Antitrust Division, the organization went even further. The politically influential AMA detailed its opposition and asked the mergers be stopped.

“The proposed mergers are occurring in markets where there has already been a near total collapse of competition,” the AMA said.

In a recent study of the mergers, the AMA cited Connecticut as one of 14 states where competition in the health care market would shrink substantially in a merger between Anthem, based in Indianapolis, and Cigna, headquartered in Bloomfield.

The Justice Department is reviewing the proposed mergers by the giant health insurers and can sue to stop them if they think they would violate federal antitrust laws.

Hartford-based Aetna has struck a deal to buy Humana for $37 billion, which would cover 33 million members. Anthem, a Blue Cross and Blue Shield insurer, wants to buy all of Cigna’s shares in a cash and stock transaction that would cost $54 billion and cover 53 million members.

The AMA told Baer that a growing body of “peer-reviewed literature” indicates greater health insurer consolidation “leads to price increases, as opposed to greater efficiency or lower health care costs.”

“The proposed mergers can be expected to lead to a reduction in health plan quality,” the nation’s largest doctors’ organization said

It also said doctors may be forced to spend less time with patients to meet practice expenses and be hindered in their ability to invest in new equipment, staff or training.

“There is no evidence supporting the insurer’s claim that the proposed mergers would lead to greater efficiencies and innovative payment and care management programs,” the AMA letter said. “There is also no economic evidence that consumers benefit when health insurers merge to respond to hospital consolidation by acquiring countervailing power.”

The insurers say the mergers will result in efficiencies and a reduction in the costs of insuring patients.

Aetna spokeswoman Cynthia Michener said, “We believe the combination of Aetna and Humana will improve the health care system and offer consumers more choices and greater access to higher quality, more affordable care.”

She also said the Aetna-Humana deal “is primarily about the Medicare marketplace, where there is robust competition and choice.” In merging with Humana, Aetna would become the largest provider of Medicare advantage plans.

Michener had no specific response to the AMA’s assertions.

“We are confident that our transaction will receive a fair, thorough and fact-based review from the Department of Justice…” she said.

Anthem spokeswoman Jill Becher said the AMA letter “merely reiterates the comments the AMA has made previously and does not reflect the actual facts regarding Anthem’s acquisition of Cigna.”

“Together, Anthem and Cigna, which have limited overlap in a highly competitive industry, will be in a better position to improve consumer choice and quality,” she said. “Additionally, we will deliver for consumers by operating more efficiently to reduce our own costs…”

She also knocked doctors for worrying about the mergers’ impact on physician fees.

“Some AMA members fear that a combined Anthem-Cigna will be able to negotiate lower rates for their services — even though that could translate to lower prices for consumers,” she said. “Providers play a critical role in our health care system, and they share responsibility for keeping health care affordable.”

Becher also said consolidation among doctors and hospitals is pushing health care costs up. She cited an analysis that determined physician prices for groups acquired by hospital systems jumped by 14 percent, on average.

The AMA said it came to the conclusion the Justice Department should stop the mergers through data compiled annually by the organization on competition in health insurance and the testimony of witnesses at House and Senate hearings on the mergers held in September.

It said forcing the insurers to divest themselves of some of their product lines would not blunt the harm created by the consolidation and the elimination of two of the five top health insurers in the nation.

“Moreover, divesture could be highly disruptive to the marketplace and cause harm to consumers, especially in Medicare Advantage markets where the elderly would be faced with a new insurer,” the AMA letter said

The American Hospital Association is also lobbying the Justice Department to block the mergers. Democratic presidential candidate Hillary Clinton said she has “serious concerns” about them as well.

 

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