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NEWS RELEASE
Apr 08, 1999


CONTACT: Jamie Court - 310-392-0522 x327

Clinton Administration Taken To Task For Failing To Break Up HMO Mergers

Patient Rights Group Demands Justice Dept. Halt Aetna-Prudential Deal
As Democrats rally across the nation today for patient rights, Consumers For Quality called upon President Clinton to make anti-trust efforts against HMO consolidation a part of his Administration's patient rights platform and stop the merger of Aetna and Prudential. The combined company would cover one of ten Americans.

The watchdog group pointed out that in Trenton, New Jersey today state regulators would be deciding the fate of the Aetna-Prudential merger, but that Clinton's "Administration has failed to break up a single HMO merger, despite the tightening corporate grip of the managed care market in the hands of seven big companies."

"A platform for patient rights which ignores the growing threat of HMO consolidation is an empty gesture," wrote Jamie Court, director of Consumers For Quality Care, which is a project of the non-partisan, non-profit Foundation For Taxpayer and Consumer Rights.

"On this day of deference to patient rights, your Administration must recognize the threat HMO consolidation poses to quality, choice, and cost in the health care market," wrote Court. "Such a commitment would prevent an Aetna-Prudential marriage which dominates the managed care market and the health care choices of Americans."


The letter to President Clinton follows:

Patients Rights Must Include Anti-Trust Break Up of Aetna-Prudential
Justice Department Cannot Continue to Ignore Threat of HMO Mergers


April 9, 1999

President Clinton
The White House
1600 Pennsylvania Avenue
Washington, D.C. 20500


Dear President Clinton:

Today, you and other Democrats will rally across the nation for the worthy cause of patient rights. In Trenton New Jersey, state regulators will holding hearings about approval of the pending Aetna-Prudential merger which, if allowed, will create the nation's largest managed care company covering one of every 10 Americans. In some markets, Aetna will cover more than 50% of patients.

A patients' rights platform which ignores the growing threat of HMO consolidation is an empty gesture. Your Administration has failed to break up a single HMO merger, despite the tightening corporate grip of the managed care market in the hands of seven big companies. Eighteen of the largest for-profit HMOs and managed care companies have now been reduced to six gigantic entities: Aetna, Cigna, United Healthcare, Foundation Health Systems, Pacificare and Wellpoint Health. Kaiser, a non-profit, is the only other HMO among the Goliaths. As Robert Hoehn, director of stock research at Solomon Brothers, recently noted, "The industry in the 21st Century will comprise a few diverse large companies who have pushed out the niche players."

In recent years, the Justice Department has approved the Pacificare-FHP merger and Foundation Health-Health Systems International consolidation without objection -- even though both were opposed by Consumers For Quality Care and have severely compromised a free market. At the same time, the Justice Department has railed against physician unionization as a threat to free market competition. However, the most pernicious consequence of unfettered HMO consolidation is that physician reimbursements and capitated rates have been pushed so low that doctors cannot adequately care for their patients. Physicians simply have no leverage against leviathan HMOs to secure the resources they need.

On this day of deference to patient rights, your Administration must recognize the threat HMO consolidation poses to quality, choice, and cost in the health care market. Such a commitment would prevent an Aetna-Prudential marriage which dominates the managed care market and the health care choices of Americans.

Sincerely,

Jamie Court
Director, Consumers For Quality Care

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