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Proposed Blues Merger Raises Many Serious Questions
HARRISBURG (November 1, 2007) - Specialty surgeons - including the ones staffing Pennsylvania's trauma centers and emergency rooms - urged state regulators to take a closer look at the impact a proposed merger between Pennsylvania's two largest insurers will have on businesses, health care professionals, and their patients.
In written comments submitted to the state Department of Insurance this month, a statewide organization representing high-risk specialty surgeons and their patients noted that the company created by the merger of Highmark and Independence Blue Cross (IBC) will result in insuring approximately 7 million Pennsylvanians or approximately 56% of the state's population. At the same time the company will become one of the largest insurers in the nation.
3PSC - Pennsylvania Physicians for the Protection of Specialty Care President Barbara Frieman, MD wrote that the positions taken by NewCo (name referring to the merged companies on file with the Insurance Department) in its filings with state regulators raise many serious public policy, consumer protection and physician/provider fairness questions.
At Tuesday's Senate Banking and Insurance Committee hearing chaired by Senator Don White (R-Indiana county), Senators questioned the CEOs of Highmark and IBC on the merger. Testimony provided at the hearing by Aetna and United Healthcare asserts that the "Super Blue" created by the merger will disable competition in Pennsylvania's health insurance marketplace.
IBC and Highmark claim that the consolidation will produce a billion dollars worth of efficiencies and economic benefits for Pennsylvania's businesses, patients, and health care professionals. 3PSC and others are calling on state regulators to require a well-defined itemization of these benefits from NewCo.
Further, the market analysis filed with state regulators - designed to examine the impact the merger would have on market competition - excludes the majority of Pennsylvanians which NewCo would insure. "Our study of the documents filed with the state reveals that NewCo excludes more than 5 million Pennsylvanians insured by Highmark or IBC," Frieman said. "We are urging the Insurance Department to collect data which reflects accurate enrollment in each and every NewCo product by county and to test this data using appropriate formulas which evaluate market concentration."
3PSC's comments and questions focused on some common sense observations about the proposed merger, an analysis of the Statement Regarding Compliance with the Competitive Standard and lastly, a comparative analysis of the proposed merger of Highmark and IBC with that of two non-profit hospital and medical service organizations in 1996.
"It is unconscionable that a transaction which will impact millions of Pennsylvania businesses, health care professionals and their patients, be permitted without the acute examination of the potential anti-competitive effect of the entire transaction by appropriate state agencies," Frieman wrote in the 6-page document.