Mergers that would have reshaped the nation’s largest insurance companies would directly affect the provider networks independent medical laboratories rely on
The proposed deals—Anthem’s $48-billion bid to buy Cigna, and a proposed $37-billion Aetna–Humana merger—would have reshaped the US health insurance industry had they not been blocked by federal judges who cited possible harm to market competition, Bloomberg reported.
For now, all four health insurance companies will continue to use their existing provider networks, which is good news for clinical laboratories. Experts had expected the bigger players in each deal—Anthem and Aetna—to possibly prune the provider networks of Cigna and Humana, respectively, which could have financially burdened thousands of healthcare organizations and independent medical laboratories.
Ruling Protects Competition, Consumers, and Healthcare Organizations
“[The mergers] would … drastically constrict competition in a number of key markets that tens of millions of Americans rely on to receive healthcare,” noted Loretta Lynch, then US Attorney General, in a National Public Radio (NPR) story.
“If these mergers were to take place, the competition among these insurers that has pushed them to provide lower premiums, higher quality of care, and better benefits would be eliminated,” she concluded.
“Coupled with the court-imposed injunction on the Aetna-Humana merger, the rulings demonstrate the vital role the US Department of Justice has in protecting patients and physicians from harmful mergers that substantially lessen competition,” said Andrew Gurman, MD, President of the AMA, in a statement.
Anthem and Cigna Respond to Ruling
But Anthem contends a combined Anthem-Cigna would have saved Americans more than $2-billion in medical costs annually. Anthem intends to file a notice of appeal, according to a company statement.
For its part, Cigna said in a news release that the court’s ruling suggests the transaction would not achieve regulatory approval, and that terminating the agreement is in the best interest of shareholders.
An Anthem-Cigna combination would have created the country’s largest health insurer, observed Forbes. The magazine also reported Cigna leaders may now look to acquire WellCare Health Plans, a smaller deal more likely to win over regulators and boost the company’s Medicare business.
No Deal for Aetna-Humana, Medicare Advantage Plan Leaders
In fact, the private market for Medicare Advantage plans was reportedly the predominant focus of the Aetna-Humana deal that was stopped by a federal judge on anti-trust grounds, the New York Times reported.
“Aetna attempted to buy a formidable rival, Humana, instead of competing independently to win customers,” said Brent Snyder, Deputy Assistant Attorney General for Criminal Enforcement, US Department of Justice, in the New York Times article.
Aetna released a statement noting that the companies have mutually ended their merger agreement.
“While we continue to believe that a combined company would create greater value for healthcare consumers through improved affordability and quality, the current environment makes it too challenging to continue pursuing the transaction,” said Aetna Chairman and Chief Executive Officer Mark Bertolini in the news release.
Did Clinical Laboratories Just Dodge a Bullet?
According to the insurers, the mergers were intended to expand consumers’ access to care and save them money on medical costs. However, antitrust officials did not appear to see it that way. This may signal a shift in thinking by federal antitrust agencies (DOJ and FTC). It may be that they now consider there to be so much market concentration in ownership of health plans that additional large mergers are now viewed as unacceptable.
For clinical laboratories, disruptive changes to existing provider networks may have been averted—at least for now.
—Donna Marie Pocius