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Panel Examines Impact of Health Care Mergers

Last Friday Families USA held its annual Health Action conference on health care in the United States. The conference offered a number of panels on various issues, including a panel focused on mergers in the health care industry. All of the presenters expressed concerns about consolidation within the health care industry, and offered advice on its impact and possible responses.

Assistant Professor of Law Erin Brown from Georgia State University gave the first presentation on general integration in the health care industry. News articles mostly focus on horizontal integration, which involves hospitals buying other hospitals or insurance companies acquiring other companies. However, there is less focus on vertical integration, and both of these trends lead to increasing consolidation.

Katherine Scarborough Mills, the Director of Policy for the Massachusetts Health Policy Commission, focused on remedies for health mergers. Massachusetts’s Health Policy Commission (HPC) is an independent, eleven member board that monitors and highlights health mergers and acquisitions. Katherine explained that Massachusetts recently created a process for public review of health market changes that is focused on containing health care costs. Through the HPC, Massachusetts can regulate health care markets and remedy anticompetitive mergers.

David Balto gave the last presentation for the panel on health insurance mergers and how consumer advocates can prevent them. He emphasized that state insurance commissioners are vital in investigating these mergers since they are publicly accountable and have a much broader mandate to determine whether mergers are in the public interest. The proposed Anthem-Cigna and Aetna-Humana mergers are a perfect example; at least 15 state attorneys general and many state insurance commissioners are now investigating them.

As outlined by David, the state insurance commissioners possess a significant advantage over other regulators and enforcers. In particular, they have the power to hold public hearings, allowing concerned third parties and citizens to raise concerns about the mergers. They can also hire experts to analyze the mergers, and must issue and defend a written decision on the subject. Additionally, insurance commissioners can ask questions and propose sweeping remedies to protect competition.

David concluded his presentation by urging consumer advocates to mobilize people in favor public hearings and to lay out why these mergers would negatively impact the health insurance market. If consumers articulate their concerns, commissioners are more likely to hold hearings. Consumer groups and unions have filed comments regarding the mergers in Virginia, Florida, and California, and they are conducting efforts in other states. He reminded the audience that in the past federal and state antitrust authorities scrutinized and investigated a proposed Comcast-Time Warner merger largely due to consumer driven concerns. When the authorities signaled they would be litigating the merger, the parties dropped the merger. The same could occur in the proposed mergers of Anthem-Cigna and Aetna-Humana but only with consumer involvement.

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