MSSNY Calls Upon State to Closely Examine Proposed Emblem Takeover of Healthnet

The state's largest physician advocacy association today called upon the New York State Insurance Department and the New York State Attorney General's office to closely scrutinize the proposed takeover of HealthNet by Emblem Health Plan to assure that it would not adversely impact patient care. The proposed takeover was reported by Crain's Health Pulse on Monday, June 1.

"Physicians already have little ability to effect changes in health insurer care authorization and claim adjudication practices because of the insurers' overwhelming market dominance" stated Dr. David Hannan, a Wayne County family physician who is the President of MSSNY. "Five companies in New York insure nearly 75% of the managed care market. This proposed takeover of HealthNet by Emblem will further the consolidation that is occurring in the New York City metropolitan region of the State. It must be examined whether this broad consolidation will harm patient care."

According to New York State Department of Health data, as of the beginning of 2008, HealthNet insured over 130,000 individuals in New York State, the large majority of whom are in New York City, as well as Nassau, Suffolk and Westchester counties. Emblem, which is the company that was created from the merger of HIP and GHI, insures over 1,000,000 individuals. Just in the last five years, the New York City health insurance market has absorbed the takeover of Oxford by UnitedHealthcare, the takeover of Empire Blue Cross/Blue Shield by Wellpoint, and the merger and proposed conversion to for-profit status of HIP and GHI.

It is for this reason that MSSNY has sought legislation (A.4301-A, Canestrari/S.5204, Breslin) that would counter this growing market domination by health insurance company behemoths and grant to independently practicing physicians the limited ability to collectively negotiate with these companies under close state supervision.

At the same time these companies' market domination has grown, so have their profits. According to a recent study by the Northwest Federation of Community Organizations (NFCO), many of the major national health insurance companies operating in New York State have accumulated billions in profits. In 2007, United made $4.65 billion. Wellpoint made $3.35 billion. Aetna made over $1.8 billion. Cigna made over $1.1 billion. Moreover, according to a report issued two weeks ago by the group Health Care for America Now (HCAN), profits at 10 of the country's largest publicly traded health insurance companies rose 428 % from 2000 to 2007. In 2007 alone, the chief executive officers at these 10 companies collected a combined total compensation of $118.6 million.

While profits have gone up, patients, businesses and health care providers have experienced the adverse effect of this market domination. Studies show that the premiums paid by employers have doubled over the last decade. Yet even with employers paying so much more, employees get less and less health coverage. Patients must pay more out of pocket. Their needed care and medication is unnecessarily delayed as a result of burdensome pre-approval procedures. Physician reimbursement also continues to be inappropriately delayed and denied.

"New Yorkers need to know if the further consolidation of the health insurance industry is going to harm their ability to access needed care" stated Dr. Hannan. "We urge a thorough examination of this takeover proposal before it is permitted to proceed."

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Medical Society of the State of New York

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