The negative effect insurance company mega-mergers will have on Boulder County

Friday, July 15, 2016 08:42 AM

Q&A with Leto Quarles, MD, President, Boulder County Medical Society

by Staff report

In a 14-page letter dated June 3, 2016, the Boulder County Medical Society, with the full support and backing of Colorado Medical Society and the American Medical Association, urged the U.S. Department of Justice to block the Aetna-Humana merger and to disregard and reject Colorado Division of Insurance’s (DOI) approval of the merger.

Colorado Medicine sat down with BCMS President Leto Quarles, MD, to discuss this letter and the expected impact the insurance company mega-mergers could have on her patients, practice and community.

Colorado Medicine (CM): Data from the AMA and federal Centers for Medicare and Medicaid services show a high market concentration in Boulder County should the Aetna-Humana proposed merger-acquisition be approved. What would be the practical consequences to Boulder physicians should this merger be approved?

Leto Quarles (LQ): In plain English, the sheer number of patients in Boulder County covered under Aetna and Humana is a huge proportion of the total population for which we provide care. If Aetna and Humana are allowed to merge, we are one step closer to a monopoly, and this new Super Aetna would have the power to dictate reimbursement rates and terms to physicians, leaving us with little or no negotiating power. It becomes a take-it-or-leave-it deal for doctors.

So, what would that look like?

Physicians in general, and certainly my colleagues here in Boulder County, view our work not just as a job, but as a calling, a relationship and a responsibility toward our patients and our community. If we are told that in order to continue taking care of many of our patients we have to accept lower reimbursement rates and even more arbitrary administrative burdens, most of us will feel we have no choice, financially or ethically, but to accept whatever pittance is being offered. Most of us would sigh and grumble, and roll up our sleeves and continue to do the best we can with what we have for those who need us.

But let’s take a closer look at that. Historically, physicians have been sighing and grumbling and rolling up our sleeves and making do more and more over the past several decades. And what has been the result? Years of published evidence is very clear on this. Each time we accept lower reimbursement for our services, that burden gets greater – not only on each of us personally as physicians, but on our patients and our communities. We cannot afford as much staff support, so we do more of the non-doctoring work ourselves – work we are not trained for, are not necessarily very good or efficient at, and that takes up more and more of our time. We cut visit times shorter, trying to squeeze more patients into a day to make up for the lost reimbursement. With less time to spend with our patients, and fewer (or fewer highly trained) professional staff, our patients are left with less support to understand and manage their health between visits, and their health and sense of well-being suffers.

When our practices are financially strapped, we are less able to serve the community in other ways: we accept fewer Medicaid or indigent patients; we have less time and energy to engage in community leadership roles, educate the public about our specialty, sponsor or support healthy community projects, lend our voices, our ears and our hearts to the community causes we care about. When doctors are less engaged with our communities, when we no longer have the time and energy to coach that Little League team, or sit on the board of the local Rotary chapter, or emcee the LGBT Seniors Ball, or whatever our passion – when we are no longer connected with our communities, not only do we as individuals suffer, but we are also more likely to drift away.

Physician mobility is at an all-time high. A generation ago, it was almost unheard of for a doctor to pick up and move to a new community once we were established in practice. Today it is not uncommon for a physician to change jobs six or more times in a career, often relocating with these changes. We are retiring younger and younger, and those of us who can’t afford to retire yet are more often transitioning to “non-clinical career tracks.” It pains us to walk away from our patients. But at the end of the day, we have to go where we can thrive – a broke, broken and burned-out physician is no good to anyone, and even we are starting to recognize that.

An Aetna-Humana merger would leave Boulder County physicians in a financially perilous position, one in which neither choice – staying in-network and accepting lower reimbursements and further imbalanced terms, or walking away and losing a large bulk of our patients – is viable or acceptable. It would significantly add to physician attrition through retirement, relocation and transition to non-clinical careers – and these are substantial losses that our growing Boulder County population can ill afford.

CM: How would these circumstances translate to patients?

LQ: Under this proposed new Super Aetna, clinical decision-making between physician and patient would be further disrupted. One very powerful insurer would channel the bulk of our patients though whatever convoluted, arbitrary and minimal-recourse processes of prior authorizations and mandated formularies and facilities they choose to impose. As I just described, physicians and our practices would be economically pushed to cut even more corners, further reducing the time we can spend with each patient and the quantity and quality of professional support our practices can provide to each individual seeking our care, both at and between visits.

The most serious consequence of these preferred network referrals, restricted formularies and panels, and poor reimbursement is that, ultimately, they dis-incentivize us to properly care for our sickest, most medically complex, and therefore most expensive patients.

CM: As you know, the Colorado Division of Insurance did not hold any public hearings or otherwise solicit commentary from the affected health care communities, including physicians, and approved the merger through inaction. If you could have had an opportunity to testify, what would you have said to the department?

LQ: I have to say I was disappointed in the Division’s decision to not provide notice to the public or give us an opportunity to participate. The business of health care today is complex to say the least, and the Division of Insurance is, ideally, one of our key partners in working to ensure that all Coloradans have reasonable and equitable access to appropriate medical care. To not be a part of this conversation around issues that so vitally affect our everyday practices and ability to care for our community was upsetting on many levels.

It’s important to keep in mind that all care is delivered locally, not globally. These concentration levels of any one commercial insurer at the MSA level are by definition monopsonistic (giving the insurance company, as “purchaser” of health care, control over price and therefore quality), and it is vitally important to consider this reality as our state decides how the business of health care will be allowed to operate in our communities.

If I’d had the opportunity to be at the table for this decision, which so impacts how we Boulder County physicians care for our patients, I would have thanked the Division, as the one state regulator charged with oversight of such a powerful industry, for hearing the voices of patients and physicians in affected communities.

We would have reminded the Division that the decision to approve this merger will directly influence care value and efficacy. We would have presented the same antitrust issues to the department that we recently made in our plea to the US DOJ.

CM: This is not Boulder County’s first antitrust rodeo. What were the dynamics when you successfully persuaded the DOJ to divest Pacificare when UnitedHealth Group was proposing to acquire them back in 2006?

LQ: Déjà vu all over again! The most vital thing that the United-Pacificare experience taught us was to underscore the critical importance of working together in organized medicine. Individually, our practices felt frustrated and threatened. But by pooling resources and standing together, Boulder County Medical Society, with the Colorado Medical Society and the AMA at our back, was able to take on that Goliath and hold our ground. Working together in organized medicine is a powerful thing.

Just like last time, Boulder County physicians have enjoyed the strong support of the AMA and its robust team of experts as well as the full backing, in terms of logistics, legal expertise, lobbying power, technical advice and amassed critical data of the Colorado Medical Society.

Boulder County is a diverse, dynamic, passionate, creative and very bright community of physicians and our patients. But ultimately, we are one small fish in the giant sea of health care in the U.S. Without the powerful and unwavering support of organized medicine in the form of CMS and the AMA, we could never have realized the successes and stability of our practice environment that we do enjoy today.

CM: Do you have any other thoughts in terms of a comparison between the United-Pacificare merger and the mergers proposed at this time?

LQ: This is the beauty of being one part of the greater whole of organized medicine. I was brand new to Boulder County in 2006. But as a part of the Boulder County Medical Society, I have had the opportunity to be briefed a number of times by our experts, and talked with many colleagues locally, gaining the shared benefit of their expertise and experience.

In the United-Pacificare proposed merger, the DOJ required a divestiture based on monopsony concerns in Boulder, even though the merged entity would not necessarily have had market power in the sale of health insurance. In that case, we successfully argued that even though consumers might not see their direct prices (premiums, etc.) immediately rise, that merger would have led to decreased physician-practice compensation, and therefore diminished services and quality of care. The DOJ rightfully recognized that a local threat to the health and well-being of health care consumers existed in our community, and took action to safeguard our practices and our patients.

The AMA has been instrumental in helping us help the DOJ clearly understand our concerns. In the past, we have opposed health insurance mergers on the basis of these monopsony concerns, and this pattern compelled the AMA to draft a model physician survey, which we were able to administer here in Colorado as well as in numerous other high-concentration states, to demonstrate these concerns and their implications. With the power of the AMA behind us, all of this data has now been amassed and is being presented to individual state insurance commissioners as well as directly to the DOJ. Our profession is therefore even better prepared than before, and our efforts are coordinated across Colorado and across the nation, thanks to the AMA.

CM: What else would you like to tell us?

LQ: While I’m inquisitive by nature, I knew almost nothing about insurance and antitrust law less than a year ago when I stepped into this role as BCMS president. In addition to fighting these insurance mega-mergers, our Boulder County Medical Society has been very active with a number of other issues and conversations of importance to physicians in our community, and as a family physician, I see patients of my own full-time. I knew fighting these mergers would be critically important for all of us physicians in Colorado and especially in Boulder County, but as one finite doctor and human being, the task seemed daunting, even overwhelming and impossible.

Instead, as a member and local leader within the unified body of organized medicine, I am hugely relieved and grateful to be one small part of an incredible engine to get this done. Our CMS CEO Alfred Gilchrest, our CMS President Dr. Michael Volz, our CMS legal counsel Susan Koontz and the entire CMS legal team, the full executive and administrative permanent staff at CMS, the crackerjack legal team at the AMA and the full general staff of the AMA, our local Boulder County Executive Judy Ladd, and every Boulder County and Colorado Medical Society member, as well as the full breadth and power of the AMA have made it possible to take this stand together. I am grateful to each of you for getting me up to speed, answering my questions and arming BCMS with all of the data, arguments and fortitude to take on this fight.

And thank you, especially, to my fellow physicians in the trenches who take time out to share your opinions, experiences, insights and anecdotes that arm us to tell our story. It is the work each of us do, day in and day out, with our patients and our community, that makes this battle worth fighting.