Unhealthy mergers: The wrong trend

Federal regulators need to put a stop to the United-PacifiCare merger, as well as review how health plan mergers are affecting physicians and patients.

Editorial. Sept. 5, 2005.

When Anthem and WellPoint Health Networks in late 2003 announced their proposed $16 billion merger, the largest ever between health plans, financial analysts predicted that it would spur even more mega-deals. And they were right.

Witness, for example, UnitedHealth Group following with a $5 billion merger with Oxford Health Plans. UnitedHealth in July announced that it wants to acquire PacifiCare Health Systems for $8.1 billion.

Then again, the American Medical Association and others for years have warned that health plans were growing more and more dominant, not only through big, headline-grabbing billion-dollar deals, but also through smaller purchases of regional plans. Witness, for example, UnitedHealth Group's summer announcement that it would buy Neighborhood Health Plan (NHP), centered in south Florida.

WellPoint, whose 28 million members make it the nation's largest private-pay health plan, and United, whose 25 million members make it the second-largest, are working their way toward becoming the dominant players in the national health coverage marketplace.

So now more than ever, federal regulators must scrutinize health plan mergers to determine and understand the negative effects they're having on patient care and health care costs, as money for care gets redirected toward corporate profits.