NEW YORK, NY--(Marketwired - September 08, 2016) - In a hearing today before New York State Department of Financial Services, representatives of the American Medical Association (AMA) and Medical Society of the State of New York (MSSNY) advised state insurance regulators to reject a deal proposed by Anthem, parent of Empire Blue Cross/Blue Shield, to acquire rival Cigna. The physician organizations warned that the pending blockbuster merger is bad medicine for New York State that threatens health care access, quality and affordability.
Physician representatives warned that the proposed merger amounts to a grab at anticompetitive market power that would quash competition in several of the state's health insurance markets. New York regulators were presented with an AMA analysis of the state's commercial health insurance markets, which examined the proposed merger based on federal antitrust guidelines. According to the AMA analysis the merger would enhance Anthem's market power to anticompetitive levels in Long Island. The merger also raises significant competitive concerns in the New York City metropolitan area and in the Hudson Valley.
"Removing a major competitor would have serious repercussions within highly populated areas in New York State where the commercial health insurance market is already highly concentrated or moderately concentrated," said MSSNY President Malcolm Reid, M.D. "A further consolidation of these markets would allow the remaining insurers to determine the scope, coverage and quality of health care. As it is, health plan networks are already too narrow, and premiums are already too high."
"Anthem has been unable to substantiate its claim that the merger would create efficiencies that would lower health care costs," said Henry Allen, the AMA's top antitrust attorney. "To the contrary, economic studies have shown that rather than passing any benefits from efficiencies to consumers, health insurer mergers actually result in higher premiums. In effect, the costly process of merging two giant insurance bureaucracies is born on the backs of patients and employers."
"If Anthem gets its way, it will have even less incentive than it does now to take care of people, and the merger would ultimately compromise the ability of physicians to advocate for their patients," said Dr. Reid. "In practice, market power allows big insurers to exercise control over clinical decisions, which undermines the patient-physician relationship and eliminates key safeguards of patient care."
"Competition, not consolidation, is the right prescription for New York's health insurance markets," said Allen. "Competition among health insurers 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."
The U.S. Department of Justice and New York State Attorney General Eric Schneiderman deserve credit for joining forces in a legal challenge to prevent this unprecedented merger deal. And Superintendent Vullo has appropriately recognized the potential consequences to patients and care providers if this huge market consolidation were to occur. Therefore, the AMA and MSSNY urge the New York State Department of Financial Services to preserve competition in the health insurance industry and to reject the proposed merger.
About the American Medical Association
The American Medical Association is the premier national organization dedicated to empowering the nation's physicians to continually provide safer, higher quality, and more efficient care to patients and communities. For more than 165 years the AMA has been unwavering in its commitment to using its unique position and knowledge to shape a healthier future for America. For more information, visit ama-assn.org.
About the Medical Society of the State of New York
Founded in 1807, the Medical Society of the State of New York is the state's principal non-profit professional organization for physicians, residents and medical students of all specialties. Its mission is to represent the interests of patients and physicians to assure quality healthcare services for all.