FOR IMMEDIATE RELEASE
The Anthem-Cigna Deal is Bad Medicine for New York
November 21, 2016, Westbury, NY—On November 21 the lawsuit against the proposed Anthem-Cigna merger filed by the U.S. Department of Justice and numerous state Attorneys General, including the Attorney General of the State of New York, is going to trial. The U.S. Department of Justice and Attorney General Schneiderman deserve credit for joining forces in a legal challenge to prevent this unprecedented merger deal. Furthermore, New York Department of Financial Services Superintendent Maria Vullo deserves credit for holding a public hearing and releasing an analysis highlighting the potential significant market impact of this proposed merger.
Both the American Medical Association (AMA) and the Medical Society of the State of New York (MSSNY) believe that the pending blockbuster merger is bad medicine for New York patients in that it threatens health care access, quality and affordability. Both organizations believe the proposed merger amounts to a grab at anticompetitive market power that would quash competition in several of the state's health insurance markets.
Indeed, a letter from Superintendent Vullo articulated the huge market impact if Anthem and Cigna were permitted to merge. Specifically, the letter noted that the proposed merger would increase Anthem’s market share across commercial products to 31.2% statewide, of which Anthem would command 9.8% of New York’s fully insured market and 47.6% of the self-insured market. The biggest impact would be felt in the New York City metro area, where Anthem would control nearly 70% percent of the commercial self-insured market in the Bronx and Staten Island, 63% in Queens and Brooklyn, and 55% in Putnam County.
“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, MD, MPP. “A further consolidation of these markets would allow the remaining insurers to determine the scope, coverage and quality of health care. 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. As it is, health plan networks are already too narrow, and premiums are already too high.
"If this merger were permitted to go forward, the combined entity 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 AMA President Andrew W Gurman, MD. "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 health insurance markets," said Dr. Gurman. "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 Attorney General Schneiderman deserve credit for joining forces in a legal challenge to prevent this unprecedented merger deal. Moreover, Superintendent Vullo deserves credit for articulating to the public in great detail the potential market impact of this proposed merger. If the merger is ultimately completed, it would be bad medicine for patients throughout New York.
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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.
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