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GEN: one big insurance company - NOT SO FAST From: art fougner, md (evsono@pipeline.com) Tue Dec 22 10:59:39 1998 Messages sorted by: [ date ][ thread ][ subject ][ author ] Next message: art fougner, md: "OB - Trials Revisited" Previous message: Luis Sanchez-Ramos, M.D.: "Re: OB: Previous PIH/Lumbar Disc Disease (long)" FYI Justice Department asked to challenge Aetna, Prudential merger By Ed Winnick WESTPORT, Dec 22 (Reuters Health) - The American Medical Association on Friday appealed to the US Department of Justice to challenge the proposed merger of Aetna with Prudential HealthCare. AMA Executive Vice President Dr. E. Ratcliffe Anderson, Jr., sent a letter to Joel I. Klein, the Justice Department's assistant attorney general of the antitrust division, to express the AMA's concern that the merger is anticompetitive and could undermine quality of care. "The market power that would be created or exacerbated by this merger would limit the choices of patients and employers," Dr. Anderson said, "...reduce competition and further erode the ability of physicians to make medical decisions based on science and the medical needs of their patients, not share price." Dr. Anderson noted that the new firm would cover approximately 10% of the insured lives in the US. He also alleged that the combined firms, with increased market power, would "...continue to drive medical decisions based on financial and stockholder expectations." Dr. Anderson added that "...Aetna has used its current market position to impose unreasonable contract provisions on physicians that define medically necessary services as 'the least costly of alternative supplies or levels of service.' Any increase in Aetna's market power would further diminish the ability of patients to receive the quality of care they seek from physicians devoted solely to their best interests." According to an AMA press release, the letter is the latest attempt to correct and expose managed care abuses. AMA officials said that the organization had attempted during the past year to "...convince Aetna to ease harmful practices that are not in the best interests of patients care and to adopt practices that will restore trust on the part of patients and physicians." Aetna said that it was "disappointed" with the AMA's actions and refuted the Association's allegations that the deal is anticompetitive. An Aetna spokeswoman told Reuters Health that the merged company would offer patients a greater network of providers to choose from, and she noted that other plans hold significantly higher market shares in certain states, particularly the Blue Cross and Blue Shield insurers. She also said that the company had made "great strides" in its relationship with providers and had met with officials from the AMA earlier this year to discuss those relationships. The spokeswoman noted that the AMA had not discussed its concerns with Aetna since the deal was announced last week. The company filed its applications with the FTC on Monday, according to the spokeswoman. She said that Aetna does not anticipate any problems with receiving FTC approval for the acquisition. As reported by Reuters Health on December 11, Aetna signed a definitive agreement to acquire Prudential HealthCare for $1 billion. The merged company would serve 22.4 million members and would be in the top three in market share in nine states. Aetna Chairman and CEO Richard L. Huber said that the company would have a market share ranging from 15% to 30% in those nine states. Calls to Aetna US Healthcare seeking comment were not returned on Monday. -Westport Newsroom 203 319 2700 Copyright © 1996, 1997, 1998 Reuters Ltd. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. stay tuned Art -- art fougner, md SonoScan/Genetic Sciences forest hills, ny evsono@pipeline.com Next message: art fougner, md: "OB - Trials Revisited" Previous message: Luis Sanchez-Ramos, M.D.: "Re: OB: Previous PIH/Lumbar Disc Disease (long)"

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