AMA Denounces Erosion Of Insurer Competition, USA

Main Category: Health Insurance / Medical Insurance
Also Included In: Litigation / Medical Malpractice
Article Date: 29 Feb 2008 - 1:00 PDT

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"The conditional approval granted by Department of Justice for the acquisition of Sierra Health Services will do nothing to block UnitedHealth Group from gaining a stranglehold on the Las Vegas commercial insurance market. This acquisition is one more example of a health insurer mega-merger that will benefit no one other than health insurer executives and stockholders.

"The Department of Justice's decision to approve the acquisition of Sierra is a step backward, and allows United to consolidate unprecedented market power in southern Nevada. While the Department of Justice did attempt to protect vulnerable seniors from having to cope with a monopoly, it left several hundred thousand people vulnerable to a health insurer with clear track record of placing profits over patient care, insensitivity to local health care needs, and a selective sense of accountability to state regulators.

"The federal decision is inconsistent with past regulatory action involving another United mega-merger. Citing the negative effects of consolidated market power, the Department of Justice in 2005 required significant divestiture in United's takeover of PacifiCare. This meaningful action to protect high-quality medical care from dominant market power acquired by United stands in stark contrast to the current decision in the Sierra buyout where the threat of an anti-competitive monopoly is much higher.

"Last March, the AMA contacted the Department of Justice and outlined our strong opposition to the dominant market power this merger would give United in the Las Vegas commercial health insurance market. We repeatedly emphasized this concern over the last 11 months with both federal and state officials.

"The AMA's efforts, in collaboration with the Nevada State and Clark County Medical Societies, have forced some concessions from United that should mitigate the harmful impact of the merger on patients and physicians. In the face of determined opposition, the Nevada Insurance Commissioner agreed last August to prohibit the health insurers from raising premiums and slashing benefits to cover merger costs. Recent actions by the Nevada Attorney General will also address health insurers' use of unfair business practices and the cumulative harm that potential corporate misconduct could inflict on patients and physicians.

"The AMA will continue to work with the Commissioner and the Attorney General to protect the people of Nevada. We urge them to closely monitor United since its conduct in other states reflects a philosophy that it is more cost-effective to violate state laws and risk a possible fine, than to comply with laws designed to protect patients, physicians and employers."

American Medical Association

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