Physicians and representatives for physician organizations came out in force recently to provide oral testimony to the Colorado commissioner of insurance regarding the proposed acquisition of PacifiCare Health Systems by UnitedHealth Group Inc.
Currently, UHC has an 11 percent market share in Colorado, and PacifiCare has a 16 percent market share. Should the merger be approved, UHC's market share in that state would jump to nearly 27 percent.
The Colorado Division of Insurance is charged with evaluating whether the proposed acquisition complies with Colorado insurance and related antitrust laws. To that end, the division conducted a public hearing Nov. 21 in Denver and invited interested parties to testify. Representatives of the Colorado AFP, Colorado Medical Society, AMA, Boulder County Medical Society and Colorado Academy of Pediatrics, as well as individual physicians, were among those providing live testimony at the hearing.
Colorado Members Speak Out
Colorado AFP member Kenneth Olds, M.D., of Greeley said that nearly all of the testimony given, including his own, opposed UHC's acquisition of PacifiCare.
"They're buying their competition to eliminate the competition," said Olds, adding that if the merger goes through, "businesses and people in our part of the country are going to have fewer choices… and that's certainly not good for patients."
Speakers were asked to give specific examples of experiences with the two HMOs, including whether each follows fair and transparent business practices and other internal operations, their respective responsiveness to physician complaints, and the perceived consequences of those dealings on patient care.
During his allotted five minutes of testimony, Olds recounted difficulties he had with UHC during his 2005 contract negotiations An example: While the negotiations were still ongoing, UHC sent letters to 3,000 of his practice's patients advising them to choose a new physician because Olds' practice was no longer participating in their health plan.
"I actually spent $1,500 sending out letters to all of our patients telling them that wasn't necessarily true," said Olds, who ultimately prevailed in his negotiation efforts.
Family Physicians of Greeley has 19 family physicians and thousands of patients in a town of nearly 80,000 said Olds, adding that his situation is far better than some of his colleagues. Because of the practice size, "I've got some clout, and I've got a hand I can play during contract negotiations," he said. But a merger could have a significant negative effect on solo and small-group practices. "It's going to be very hard on them because they'll have to take whatever contracts they are offered," said Olds.
FP Earl Carstensen, M.D., of Aurora is one of those solo docs, and his testimony reflected his concerns. He pointed out that UHC patients represent 40 percent of his practice; PacifiCare represents another 20 percent. "Without fair contracts from them, I will be forced to close my practice," he told the commissioner.
Carstensen made several requests of UHC while at the podium. He asked company officials to recognize the complexity of primary care, to establish an accurate and meaningful quality/efficiency rating system and to adopt fair contracting practices. "Give FPs a voice," he said. "We know how to deliver cost-effective medical care, so work with us."
Insurance Companies Reply
The two insurance companies involved in the merger say the action would benefit consumers. "PacifiCare and UnitedHealthcare share a commitment to providing a wide range of products and services at an affordable cost to meet the diverse health care needs of employers and consumers," said a UHC spokesperson. If the merger is approved, "members will have access to a wider network of quality physicians, other health care providers and hospitals."
The spokesperson called the hearing "a good opportunity for all interested parties to voice their opinions."
Commissioner to Decide Within 30 Days
Ultimately, the decision falls on Commissioner David Rivera. According to Rebecca Kramer, a financial analyst in the financial affairs section of the Colorado Division of Insurance, Rivera has 30 days from the day of the hearing to make a decision. She said this particular merger request was investigated more closely than most because of added questions regarding claims processing and market conduct issues. "We went a bit deeper," said Kramer.
"The commissioner will take staff research and opinions into consideration," said Kramer. He'll also review the oral testimony and the 130 letters received from physicians, physicians groups and interested parties that were entered into the public record, she said.
Olds doesn't think his testimony will sway the commissioner and feels certain the merger will be approved. "I'd bet my house against a doughnut," he said. "But at least we're on record as opposing it."
Trevor Stone, AAFP's manager of private sector advocacy, said the Academy will continue to monitor not only the possible merger in Colorado, but similar situations that may unfold in other parts of the country. "This could be the first of more to come," said Stone. "The real question is whether this merger will stifle the competition and give too much market power to one insurer."
