The American Medical Association continues to come out swinging against the latest step in the consolidation in the health insurance market.
The Chicago-based professional organization is opposing the takeover of Sierra Health Services by UnitedHealth Group, a Minneapolis-based health insurance company.
The AMA has opposed the Sierra acquisition since it was announced last March, and it lashed out at a recent decision by the Department of Justice giving conditional approval to the deal.
The AMA issued a strongly worded statement after the announcement in late February, continuing a strident war of words against the insurer.
United and Sierra announced their merger on March 12, 2007, with United offering to buy Las Vegas-based Sierra for $2.6 billion, or $43.50 per share. The AMA announced its opposition to the merger 10 days later, taking the unusual step of firing off a letter to then-U.S. Attorney General Alberto Gonzales seeking to block the transaction.
Last month, the Department of Justice approved the merger, which was formally completed on February 25. As a condition of receiving the department’s approval, UnitedHealth Group said it will divest its individual SecureHorizons Medicare Advantage HMO plans in Clark and Nye counties in Nevada to Humana Inc. Those plans have about 25,000 members.
Sierra’s subsidiaries serve more than 860,000 people through health benefit plans for employers, government programs and individuals.
"The conditional approval granted by the Department of Justice for the acquisition of Sierra Health Services will do nothing to block UnitedHealth Group from gaining a stranglehold on the Las Vegas commercial insurance market," said the comment, attributed to William G. Plested III, MD, the AMA’s immediate past president.
"The Department of Justice’s decision to approve the acquisition of Sierra is a step backward and allows United to consolidate unprecedented market power in southern Nevada,” Plested continued. Despite the divestiture to Humana, he said, the acquisition leaves “several hundred thousand people vulnerable to a health insurer with a clear track record of placing profits over patient care."
The AMA has increasingly raised the rhetoric against United over the past year. When New York Attorney General Andrew Cuomo announced an investigation of Ingenix, a UnitedHealth Group subsidiary, and 16 other insurers, the organization issued an immediate statement that singled out the business activities of United.
"This is one more example of UnitedHealth playing by its own rules without regard to state laws designed to protect patients and physicians," the February 13 statement by the AMA said. "UnitedHealth has developed a track record of regulatory violations stretching from Monterey to Montauk…. The AMA greatly appreciates the Attorney General's interest and leadership in protecting consumers, and we offer our full cooperation in any effort to hold UnitedHealth accountable to New York state laws."
In vowing to continue opposition to the Sierra acquisition, the AMA said it would "continue to work with the commissioner and the attorney general to protect the people of Nevada. We urge them to closely monitor United since its conduct in other states reflects a philosophy that it is more cost-effective to violate state laws and risk a possible fine than to comply with laws designed to protect patients, physicians and employers."