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DOJ prevents health care merger in Michigan with threat of anti-trust lawsuit

Posted On Wed, March 10, 2010

At the urging of the U.S. Department of Justice, a planned merger between a Michigan branch of Blue Cross Blue Shield has been stifled following threats of an anti-trust lawsuit.

According to the DOJ, a merger between Blue Cross Blue Shield of Michigan and Physicians Health Plan of Mid-Michigan would have warranted a lawsuit because it would have given Blue Cross-Michigan control of almost 90 percent of the commercial health insurance market in the Lansing, Michigan area. With such control and the elimination of competition from the market, Blue Cross would be free to raise prices while reducing the quality of its commercial health insurance service.

Additionally, an acquisition would have given Blue Cross the ability to control physician reimbursement rates and potentially harm the quality of healthcare delivered to consumers.

"We welcome the decision by Blue Cross-Michigan and Physicians Health Plan of Mid-Michigan to abandon their deal, which will preserve competition among health insurance companies in Lansing," said Christine Varney, the assistant attorney general in charge of the DOJ's Antitrust Division. "The merger would have likely led to higher prices, lower levels of service and decreased quality of healthcare for consumers."

Without any merger, Blue Cross already controls approximately 70 percent of the market share in Lansing, making it the largest provider in the area. PHP is the second largest provider with a 20 percent market share.ADNFCR-2297-ID-19662621-ADNFCR

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