Monopsony and Health Plan Mergers: Does Anthem-Cigna Signal a Shift In Policy?

September 2017

NORTH AMERICA COLUMN BANNER

Monopsony and Health Plan Mergers: Does Anthem-Cigna Signal a Shift In Policy?
By Joseph M. Miller and Brian C. Lewis

Edited by Rob Kwinter

Anthem’s proposed merger with Cigna, the largest in the history of the health insurance industry, has received no shortage of interest as the merging parties have faced off against the government—and, at times, each other—in litigation that resulted in a permanent injunction blocking the merger and Anthem ultimately calling off the deal. The D.C. Circuit opinion upholding the injunction has been getting a lot of recent attention for its discussions of efficiencies. However, a less-noted but very important point raised in Judge Brett Kavanaugh’s dissent warrants further examination, as it has huge implications regarding how the Antitrust Division of the Department of Justice (“DOJ”) approaches bringing monopsony allegations in the health plan merger context.

After focusing much of his dissent on how the merger would clearly be beneficial and procompetitive to downstream employer-consumers, Judge Kavanaugh, surprisingly, observed that the Government could have ultimately blocked the merger based on the merger’s monopsony effects on hospitals and doctors in the upstream provider market. Judge Kavanaugh would have remanded to the lower court to decide that issue in the first instance.[1] Judge Kavanaugh’s willingness to block the merger on these grounds is notable for multiple reasons. First, Anthem-Cigna…

ACCESS TO THIS ARTICLE IS RESTRICTED TO SUBSCRIBERS

Please sign in or join us
to access premium content!