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CMA and AMA urge DOI to oppose Anthem and Cigna merger



April 01, 2016
Area(s) of Interest: Advocacy Commercial Payors Payor Issues and Reimbursement 

Last week, the California Medical Association (CMA) testified before the California Department of Insurance (DOI), urging it to oppose the proposed merger of Anthem and Cigna.


“We are concerned with the impact of this merger on physicians and patients,” said Francisco Silva, CMA general counsel and senior vice president. “We are concerned that this merger would compromise access to health care, health care quality and patient affordability.”


The American Medical Association (AMA) also sent representatives to the hearing to testify against the merger. “We oppose Anthem’s goal of dominating the California health insurance market by purchasing Cigna – the state’s sixth largest insurer,” said Henry Allen, AMA’s top antitrust attorney.


“California should act to block the harmful merger and foster a more competitive marketplace that will operate in patients’ best interests,” Allen said. “The state’s fragile health care system should not be left vulnerable to a giant health insurance company with anticompetitive market power. The consequences of the proposed merger would have negative long-term consequences for health care access, quality and affordability in California.”


At the hearing, CMA presented DOI with the results of a physician survey showing that 85 percent of California’s physicians are opposed to the merger of health insurance giants Anthem and Cigna.


The survey – which gathered data from 989 practices in 47 California counties, representing physicians from a range of specialties and practice sizes – sought to gauge California physicians’ perspective on the proposed Anthem-Cigna and Aetna-Humana mergers, as well as gather insight into the tactics undertaken by insurance companies’ in their negotiations with physicians.


Physicians surveyed said their concerns about the consequences of the market consolidation include: narrow physician networks that make it more difficult for patients to find care from in-network physicians (82.2 percent); reduced ability for physicians to advocate on behalf of their patients (81.9 percent); and a reduction in the quantity or quality of services that physicians can offer their patients (88.8 percent). Physicians expressed similar concerns over the Aetna-Humana merger.


“If these mergers go through, the impact on everyday people trying to receive medical care in a timely and affordable manner would be devastating,” Silva said. “The result would be less competition with only the health insurers coming out winners.”


AMA noted that health insurer consolidation compromises the ability of physicians to advocate for their patients. In practice, market power allows insurers to exert control over clinical decisions, which undermines the patient-physician relationship and eliminates crucial patient care safeguards. Competition among health insurers, on the other hand, can lower premiums, enhance customer service and spur innovative ways to improve quality while lowering costs. Patients benefit when they can choose from an array of insurers who compete for their business by offering desirable coverage at competitive prices.

“Competition, not consolidation, is the right prescription for California’s health insurance markets and underscores what is ultimately at stake: the health and safety of the state’s patients,” Allen said. “The physician role as patient advocate is undermined as large health insurers replace clinical judgment with corporate policy. Conditions in most markets are now heavily tilted toward insurers, giving them an unprecedented advantage in determining the scope, coverage and quality of health care."


AMA also presented state regulators with an analysis that found the proposed Anthem-Cigna merger would run afoul of federal antitrust guidelines in highly-populated metropolitan areas across California.


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