NEW YORK – In a hearing today before New York State Department of Financial Services, representatives of the American Medical Association (AMA) and Medical Society of the State of New York (MSSNY) advised state insurance regulators to reject a deal proposed by Anthem, parent of Empire Blue Cross/Blue Shield, to acquire rival Cigna. The physician organizations warned that the pending blockbuster merger is bad medicine for New York State that threatens health care access, quality and affordability.
Physician representatives warned that the proposed merger amounts to a grab at anticompetitive market power that would quash competition in several of the state's health insurance markets. New York regulators were presented with an AMA analysis of the state's commercial health insurance markets, which examined the proposed merger based on federal antitrust guidelines. According to the AMA analysis the merger would enhance Anthem's market power to anticompetitive levels in Long Island. The merger also raises significant competitive concerns in the New York City metropolitan area and in the Hudson Valley.
"Removing a major competitor would have serious repercussions within highly populated areas in New York State where the commercial health insurance market is already highly concentrated or moderately concentrated," said MSSNY President Malcolm Reid, M.D. "A further consolidation of these markets would allow the remaining insurers to determine the scope, coverage and quality of health care. As it is, health plan networks are already too narrow, and premiums are already too high."
"Anthem has been unable to substantiate its claim that the merger would create efficiencies that would lower health care costs," said Henry Allen, the AMA's top antitrust attorney. "To the contrary, economic studies have shown that rather than passing any benefits from efficiencies to consumers, health insurer mergers actually result in higher premiums. In effect, the costly process of merging two giant insurance bureaucracies is born on the backs of patients and employers."
"If Anthem gets its way, it will have even less incentive than it does now to take care of people, and the merger would ultimately compromise the ability of physicians to advocate for their patients," said Dr. Reid. "In practice, market power allows big insurers to exercise control over clinical decisions, which undermines the patient-physician relationship and eliminates key safeguards of patient care."
