The proposed merger between United HealthGroup and Pacificare is running into objections from consumer groups and other advocacy organizations in several states. Most recently, the AMA’s Colorado branch protested the bonuses and other financial rewards that would accrue to Pacificare executives if the merger is consummated.
The total amount of the bonuses is around $315 million; the AMA appears to be as concerned, if not more so, about the threat to competition in Colorado should the merger proceed.
From the AMA’s side, it is easy to see why they are concerned. Eliminating payers increases the market power of the payers remaining. And the more market power the payer has, the more vulnerable the provider is.
More consolidation is a natural consequence of the industry maturing; that doesn’t mean the various constituencies are going to like it.
Nov
27
