Doctors testify against United-PacifiCare merger

The AMA joins the Colorado Medical Society in fighting the regulatory approval of the latest combination of large health plans.

By Jonathan G. Bethely, AMNews staff. Dec. 12, 2005.

For organized medicine, Colorado is ground zero in the fight against the proposed merger of UnitedHealth Group and PacifiCare Health Services Inc.

The Colorado Medical Society and the AMA on Nov. 21 testified against United's proposed $8.1 billion purchase of PacifiCare, saying that the deal would give the newly combined health plans far too much market power over physicians and patients.

"The AMA believes that the market power that results from mergers like the proposed United-PacifiCare merger directs money away from patient care and into corporate profits," said AMA Trustee Edward Langston, MD, who testified at the hearing.

At the least, the AMA and the Colorado Medical Society told the Colorado Division of Insurance during the hearing in Denver, United and PacifiCare should have to give back for public health initiatives an amount equal to the $315 million the companies plan to hand out in executive bonuses if the merger is approved, like similar deals made with California and Georgia regulators when WellPoint acquired Blues plans in those states. The medical associations also argued that United should not try to pay for the merger by cutting spending on health care.

Minnetonka, Minn.-based United's proposed acquisition of Cypress, Calif-based PacifiCare has been approved by PacifiCare's stockholders, and by six of the 10 states in which the companies do business. The deal still needs the Justice Dept.'s approval.

Physicians concentrated their battle in Colorado because it's the only state in which United and PacifiCare are equal in market share, and thus would have the greatest impact on competition. Dr. Langston, a family physician from Lafayette, Ind., said he believes the decision made in Colorado could have an effect in how the Justice Dept. rules on the merger.