By Jad Chamseddine, CQ Roll Call
September 9, 2015 -- Ahead of a House hearing on health market competition, the American Medical Association (AMA) is releasing studies showing that the industry would suffer great harm if proposed mergers among the largest health insurers are not scrutinized.
The country's largest physicians' association opposes health insurance consolidation out of concern that more combinations would boost costs across the country. "A lack of competition in health insurer markets is not in the best interests of patients or physicians," AMA President Steven J. Stack said in a prepared statement Tuesday.
The studies were released ahead of a House Judiciary Regulatory Reform, Commercial and Antitrust Law Subcommittee hearing scheduled for Thursday focusing on the state of competition in the health care marketplace. The hearing will be one of many, according to statements made by House Judiciary Chairman Robert H. Goodlatte, R-Va., and subcommittee Chairman Tom Marino, R-Pa.
Republicans blame the 2010 health care law for increased consolidation in the health care industry.
"Since its enactment, Obamacare has had a significant impact on each of these markets," according to the statement. "Americans are already starting to see their medical bills rise, the quality of their care becoming diminished, and their options for care becoming more limited." Similar statements were leveled against the White House by Senate Majority leader Mitch McConnell, R-Ky, after Louisville, Kentucky-based Humana announced its merger with Aetna Inc.
AMA Board of Trustees member Barbara L. McAneny is expected to appear as a witnesses on Thursday and argue against Aetna acquiring Humana Inc. and Anthem Inc. buying Cigna Corp. While Congress does not have a say in whether the deal will ultimately pass regulatory muster, the tone lawmakers strike during the hearings can help shape public opinion and pressure the Justice Department to block the combinations.
The AMA has long cautioned against excessive consolidation and said in its most recent study that companies with higher market shares are "largely the result of mergers and acquisitions" in the industry. Without considering the proposed mergers, the AMA's study shows that out of the 388 geographic markets in the country, about 70 percent were highly concentrated, and that in 89 percent of the geographic markets, one insurer has at least a 30 percent market share.
Using an index applied by the Justice Department and Federal Trade Commission to measure market concentration, the AMA found that Anthem's $53 billion acquisition would significantly enhance market power of the combined company in 10 of the 14 states in which Anthem provides commercial coverage.
The deal would also "warrant scrutiny" in four of the remaining states in which coverage is provided. The physicians association said the deal would reduce overall competition in 111 geographic areas within those states.
The combination between Aetna and Humana would only have a considerable effect on 15 markets in seven states.
A similar study by the American Hospital Association was made public last month urging government regulators to block both transactions. AHA CEO Richard J. Pollack is expected to appear as a witness on Thursday.