Hospitals played significant role in blocking two big insurer deals

A doctor.

Hospitals and other providers played a significant role in the stifling of two pending mergers of health insurance giants.

Advocacy groups for both physicians and hospitals played key roles in lobbying the U.S. Department of Justice to ensure it would take actions to block the mergers between Aetna and Humana, and Anthem and Cigna, USA Today reported.

The Justice Department took legal action against both mergers last week, potentially stifling deals worth more than $90 billion combined. U.S. Attorney General Loretta Lynch said allowing the transactions to proceed would dramatically stifle competition in many key markets in the U.S.

Hospitals worked with labor unions to create a group called the Campaign for Consumer Choice in order to gin up resistance to the two deals, according to USA Today. Physician groups also worked with the organization and another one called the Coalition to Protect Patient Choice.

“The opposition was overwhelming. We spoke with one voice,” David Balto, a former Federal Trade Commission antitrust lawyer representing the Coalition to Protect Patient Choice, told USA Today.

The federal government began expressing serious misgivings in early July. Of particular concern was how the Aetna and Humana merger would affect the Medicare Advantage market. Both insurers have significant numbers of Medicare Advantage lives. That Humana was preparing to shed some of its Medicare Advantage assets prior to closing the deal did not assuage regulators.

The feds have also been aggressive in recent months regarding hospital deals, taking actions to block them in both West Virginia and Chicago, although resistance the latter deal has so far been squelched in federal court.

“Competition today drives these four successful firms to fight to give us affordable options,” Principal U.S. Deputy Associate Attorney General Bill Baer told USA Today. “There is no reason to put that dynamic at risk and that is why we are asking the court to stop these mergers and keep competition working for the benefit of the American consumer.”

- read the USA Today article