FOUNDATION HEALTH SYSTEMS: NEW COMPANY GETS FINAL NOD
After a "long and bitter" public review process, theThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
California Department of Corporations has approved the $4.6
billion merger of Foundation Health Corp. and Health Systems
International, creating the nation's fourth-largest health care
company (AP/Colorado Springs GAZETTE-TELEGRAPH, 4/2). The new
company, which will be called Foundation Health Systems Inc.,
will have 4.9 million enrollees in 17 states (WALL STREET
JOURNAL, 4/2). In consenting to the deal, Department of
Corporations Commissioner Keith Bishop "noted that the agency
obtained commitments from the plans that will ensure that
'decisions relating to health care will be made by qualified
medical practitioners without regard to administrative and
financial considerations.'" Bishop said the new company will
"certify periodically ... that the plans are in compliance"
(Tuller, SAN FRANCISCO CHRONICLE, 4/2).
QUALITY CONCERNS: Jamie Court, director of Consumers for
Quality Care, said, "The real issue here is the new leverage that
the expanded company (arising form the Foundation-Health Systems
merger) will have to squeeze patient services below acceptable
levels of care and to drive reimbursement rates to doctors'
groups even lower." The CHRONICLE reports that the California
Medical Association expressed "major concerns" about the merger
trends in that state. CMA President Dr. Rolland Lowe said, "The
critical question is at what point do these mergers become a
serious threat to patient care? We see California may be
dominated by only three to five large companies, and we wonder if
that would take the competitive edge out of things." Foundation
spokesperson Kurt Davis said, "Our society has decided that
health care can best and most efficiently be run as a business
and as such is going to be subject to operate in a manner similar
to other businesses" (4/2).