Failure of insurer mergers good news for doctors

gavel and books
Courts struck down two major health insurer mergers this year.

Courts struck down two major health insurer mergers this year, which some say is good news for both doctors and patients.

The mergers would have eliminated competition in the insurance markets, increasing costs for patients and giving physicians less bargaining power, according to a provider group and an industry expert.

A federal judge last month blocked Anthem’s acquisition of Cigna, saying it would violate antitrust law by lessening competition in the national accounts markets if the second- and third-largest commercial health insurers in the U.S. were allowed to merge. In January, a judge ruled against Aetna’s deal to purchase Humana, saying that merger would lessen competition in the Medicare Advantage and individual exchange markets.

Conference

13th Partnering with ACOS & IDNS Summit

This two-day summit taking place on June 10–11, 2019, offers a unique opportunity to have invaluable face-to-face time with key executives from various ACOs and IDNs from the entire nation – totaling over 3.5 million patients served in 2018. Exclusively at this summit, attendees are provided with inside information and data from case studies on how to structure an ACO/IDN pitch, allowing them to gain the tools to position their organization as a “strategic partner” to ACOs and IDNs, rather than a merely a “vendor.”

“In filing lawsuits to enjoin these mergers from proceeding, the U.S. Department of Justice has signaled its strong concerns about allowing these already huge insurance companies to merge into even larger and more powerful ones," said Robert W. Seligson, president of the Physicians Advocacy Institute (PAI), in a statement reacting to the ruling. 

PAI applauded the decision to block the Anthem-Cigna merger that would have created the largest health insurance company in the country as it would reduce choice for patients by creating more restricted in-network systems and be bad for physicians who chose to accept insurance offered by the national and state healthcare exchanges.

With insurers competing for customers, primary care physicians will keep the opportunity to negotiate on behalf of their patients, Randal Schultz, J.D., a Missouri lawyer, told Medical Economics. It’s also incentive for doctors to jump on board with new delivery and payment models. Doctors who can reduce patients’ healthcare costs will save money that should go back into their pockets under pay-for-performance models.

However, the merger battle isn’t over yet for Anthem, as it has been granted an expedited appeal of the ruling against its proposed deal with Cigna. Anthem is also fighting a separate court battle with Cigna, which sued to end the merger agreement and collect damages. Anthem then countersued, and the Delaware Court of Chancery has since approved its motion to temporarily stop Cigna from exiting the contract.

The American Medical Association, meanwhile, has warned about the possibility of “politically driven settlement negotiations” between Anthem and the Justice Department that would result in the insurer closing its deal with Cigna.

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