State Society Testifies About Blues Merger Concerns
The Pennsylvania Medical Society cannot support a merger of Highmark and Independence Blue Cross (IBC) until the benefits of the merger are specifically defined, State Society President Peter S. Lund, MD, FACS, said in testimony before the Pennsylvania Insurance Department on July 10, 2008.
“We have not been provided with any evidence which demonstrates these benefits. So we remain opposed to the proposal now before the department,” Dr. Lund said.
The companies have contended that they will be able to run more efficiently and cost-effectively, but the State Society is concerned with studies that show that cost savings end at the 100,000 enrollee mark. The merged company would have an enrollment of more than 7 million.
The State Society also is concerned that the merger would reduce competition in the health insurance market, resulting in less leverage and therefore lower reimbursement for physicians and making it more difficult for new insurance companies to enter the market.
Although Highmark and IBC say they do not compete, there are areas where Highmark territory borders IBC territory, as defined by the Blue Cross Blue Shield Association. In these areas, physicians can choose to participate with just Highmark, just IBC, or both. If the companies merged, the physician would only have one choice—reducing the physician’s bargaining power.
Dr. Lund also asked the department to consider the patient-doctor relationship during its deliberations.
“It is imperative that when the department conducts its analysis of the potential merger that it takes into consideration the importance of this relationship and what effect this merger could have on it,” he said.
Last Updated: 7/17/2008