NY legislators study health plan mergers

With health system restructuring and hospital closures already on the way, health reform fever is in the air in New York. Now, it's taking the form of a state Assembly hearing on consolidation of New York's health plans. All told, mergers, acquisitions or affiliation agreements have impacted 12 million New Yorkers over the past three years. The Assembly's committees on Health and Insurance are meeting today to consider whether such consolidation has throttled providers' ability to negotiate fair deals with the new entities, and whether new laws are necessary to give providers a fair shake in such negotiations. Among other speakers, the committee will hear from MediSys Health Network CEO David Rosen, whose contracting troubles with United HealthGroup subsidiary Oxford [1] have made national news. Not surprisingly, Rosen contends that the need for health plan regulation, or least stricter enforcement of existing regs, is very significant.

The committee's concern is not an unreasonable one, given that the state's HMOs posted $1 billion in profits in 2005 while hospitals lost $2 billion during the same period. And the issue is a national one--just look at the health plan consolidation in California's managed care industry [2]! It will be interesting, and trend-setting, if New York actually attempts to regulate deal-making between HMOs and providers.

Get more information on this issue:
- read the committees' "Notice of Public Hearing [3]"

Related Article:
WellPoint Q4 results up sharply, in wake of Anthem merger. Report [4]