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Physicians Ask DOJ to Block Big Insurer Mergers

By Jad Chamseddine, CQ Roll Call

November 12, 2015 -- The American Medical Association (AMA) is pushing the Department of Justice (DOJ) to block two health insurance mega-mergers, arguing that merely forcing the companies to sell off assets won't prevent price increases.

The country's largest association of physicians has previously been hostile to Aetna Inc.'s acquisition of Humana Inc., and Anthem Inc.'s purchase of and Cigna Corp. But in a letter made public on Wednesday, the group said "any remedy short of blocking the mergers would not adequately protect consumers," suggesting the government should not settle for just divestitures.

The AMA said the increased size of the health care insurance companies would give them too much power and result in physicians being reimbursed at "below competitive levels," which can affect the care patients receive.

"Physicians may be forced to spend less time with patients to meet practice expenses," the AMA said.  "They also may be hindered in their ability to invest in new equipment, technology, training, staff, and other practice infrastructure that could improve the access to and quality of patient care."

The association previously appeared before antitrust panels in the House and Senate Judiciary committees to warn about the deals' risks to competition.

Proponents of the merger, including the merging companies, vow that synergies created by the mergers would lead to cost cutting and further consumer benefits. The AMA questioned whether cost savings would flow to consumers, and argued that high barriers to entry would make permanent any reduction in competition resulting from the deals.

The pushback has come from various other corners, including the American Hospital Association, an organization of nearly 5,000 hospitals and health care systems that has clashed with the AMA in the past over the effect of hospital mergers on independent physicians. But the two are aligned over the insurance mega-mergers, which would reduce the number of large national health care insurance companies to three from five. Anthem would become the nation's largest, followed by UnitedHealth Group Inc., and Aetna.

The mergers have also piqued interest in Congress. Democrats showed opposition to market consolidation in hearings held by the House Judiciary and Senate Judiciary subcommittees. Several Republicans also showed concern over the deals, including Georgia Rep. Doug Collins. The Republican blamed the spate of mergers in the health care industry on the Affordable Care Act.

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