In latest hearing, provider groups come out swinging against insurer mergers

During the third of three recent hearings on consolidation in the healthcare industry, representatives from the provider community made it clear they are not going to let the pending health insurer mergers go down without a fight.

During the House Judiciary Committee hearing Tuesday afternoon, Aetna CEO Mark Bertolini and Anthem CEO Joseph Swedish reiterated many of the same points they've made--most recently during a Senate hearing--in support of their respective mergers with Humana and Cigna.

Swedish pointed out that Anthem and Cigna's combined analytic capabilities "will empower better informed decision-making between patients and physicians and help safeguard affordable access to remarkable new clinical discoveries, treatments and technologies." In addition, the companies' combined health and wellness expertise will help fill gaps in recommended care, and more proactively engage consumers in managing their own health conditions.

Bertolini, meanwhile, testified that "the Aetna acquisition of Humana is about two companies coming together to offer a large number of consumers a broader and higher-quality array of more affordable products." After the acquisition, he said, Aetna will have a product portfolio balanced more evenly between commercial and government products such as Medicare and Medicaid.

But Andrew W. Gurman, M.D., (pictured above right) president-elect of the American Medical Association (AMA), and Tom Nickels, executive vice president of the American Hospital Association (AHA), both countered the insurers' arguments in their testimonies. Both the AHA and the AMA have been vocal in their opposition to the deals.

Nickels indicated the AHA is "very skeptical" of the insurers' claims that they are simply seeking to acquire companies that have complementary business lines and that there would be no overlaps leading to increased market consolidation. He also challenged Bertolini and Swedish's oft-cited argument that all healthcare is local, noting that in their arguments for the deals "they cite national statistics on the number of competitors instead of the actual competition in local markets."

Further, the insurance CEOs' example of Oscar Health to prove that new competitors can make it in the insurance market is suspect, he said, because it's one of only two for-profit companies that were not already insurers to enter state marketplaces so far, it has penetrated only a single urban market and it reported significant losses last year.

For his part, Gurbman argued that consolidation in the health insurance industry also compromises the ability of physicians to advocate for their patients, especially when doctors are forced to negotiate with a "mega-merged conglomerate."

Excess market power, he said, allows insurers to exert control over clinical decisions, which ultimately undermines the doctor-patient relationship and eliminates crucial safeguards of patient care. "This underscores what is ultimately at stake here--the health and safety of America's patients," Gurman testified.

Counter to the insurers' claims, he argued that coordinated care does not require massive consolidation among health insurers. He also warned that if the deals are approved, post-merger remedies are likely to be ineffective and highly disruptive, concluding that "you cannot unscramble an egg."

Yet while "certain medical societies have opposed our deal out of concern it will affect the income of doctors," Bertolini said in his testimony, "we believe that there will be no material effect on revenue for doctors as a result of the acquisition." In addition, Aetna is committed to working with providers to transition to value-based payment models, he said.

Jaime S. King, a professor from the University of California's Hastings College of Law, also was critical of the mergers. Her testimony echoed that of Northwestern University professor Leemore Dafney at the previous Senate hearing, which cited studies of previous health insurer mergers that say they had no effect on healthcare quality and in some cases, resulted in higher premiums.

To her, the mergers "appear to be more about staking out territory and acquiring leverage than anything else," King said.

But Edmund F. Haislmaier, a senior research fellow of health policy studies for The Heritage Foundation, told the committee that he conducted his own analysis of the effects of the proposed deals and with a few exceptions, found little evidence that either deal would result in significant overlap in most markets.

However, Haislmaier also didn't let providers off the hook, noting that market, too, is highly concentrated. "This is why I'm kind of in the middle here, because you have the monopsonists complaining about the monopolists, and the monopolists complaining about the monopsonists," he said.

To learn more:
- here's the hearing replay

Related Articles:
American Medical Association: Insurer mergers would diminish competition
Lawmakers, industry leaders clash over effects of healthcare consolidation
Hospital group: Aetna-Humana merger would lessen Medicare Advantage competition
American Hospital Association takes aim at Anthem-Cigna merger
Senate panel grills Aetna, Anthem execs on merger deals
Too soon for Aetna, Anthem to declare victory in merger review process
3 burning questions about the major insurer mergers
Partisan bickering distracts from real healthcare policy issues

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