Business
AMA to develop model legislation covering health plan mergers
NEWS IN BRIEF — Posted July 3, 2006
Taking a step in the fight against consolidation of the managed care market, the AMA will prepare model state legislation to allow for more complete state review of future mergers and acquisitions of health plans.
At the AMA's Annual Meeting in June, delegates directed the Association to develop the legislation after they expressed concerns that such deals, which require both state and federal regulation, lead to too much market power over physicians and patients and siphon money away from medical care into corporate profits.
The AMA and several state medical societies spoke out last year against UnitedHealth Group's acquisition of PacifiCare Health Systems Inc. United is the nation's second largest health insurer, after WellPoint Inc. Doctors testified in state hearings before the Colorado Division of Insurance that the merger, affecting 10 states, would have a negative impact on competition and force higher premiums on patients.
"This is a 'bully on the playground' situation, and we believe there are dangerous imbalances in the health care marketplace," M. Eugene Sherman, MD, a cardiovascular disease specialist and an alternate delegate from Aurora, Colo., said at the AMA meeting.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2006/07/03/bibf0703.htm.
