One of the nation's largest managed-care companies recently got a whole lot bigger, raising concerns the negotiating power of this new uberHMO will mean trouble for physicians.
Last month, Blue Bell, Pa.-based Aetna U.S. Healthcare announced it plans to buy Newark, N.J.-based Prudential HealthCare for $1 billion. Included in the sale are the Prudential HMO, PPO, point-of-service and indemnity products. The deal is expected to close in the second quarter of this year.
The acquisition would make Aetna the country's largest health insurer, with approximately 22.4 million enrollees. Of those, 18.4 million are in managed-care plans, making Aetna the nation's largest managed-care company as well. Aetna currently contracts with about 220,000 physicians, and Prudential has pacts with about 140,000 doctors. The Prudential deal follows Aetna's purchase last summer of NYLCare Health Plans, which added 2.2 million enrollees.
Aetna's providers must sign a contract to accept the entire Aetna product line. Some doctors have fought Aetna over the pact-and even left the network-because they don't want to participate in the HMO and consider other provisions intrusive. Aetna spokeswoman Jill Griffiths says the contract will benefit patients by building a single nationwide network of Aetna physicians.
Late last month, the American Medical Association asked the U.S. Department of Justice to challenge the proposed merger. In a letter to Assistant Attorney General Joel Klein, AMA Executive Vice President E. Ratcliffe Anderson Jr., M.D., wrote that the merger would "further erode the ability of physicians to make medical decisions based on science and the medical needs of their patients, not share price."
Stuart Friedman, vice president of the Tiber Group, a Chicago-based healthcare consulting firm, says Prudential has traditionally been perceived as more provider-friendly than Aetna. "The Prudential model has been a bit more hands-off and more of a higher-cost, higher-premium product," he says.