Winners, losers in health care deal

By Marshall Allen

Wednesday, Feb. 27, 2008 | 2 a.m.

When the largest health insurance merger in Nevada history won approval from the U.S. Justice Department, it doused the deal’s critics with a dose of reality — they could do little to stop it in the end.

National giant UnitedHealth Group will be allowed to buy out Sierra Health Services, the state’s largest health insurer with about 650,000 customers, after it sells its share of the Medicare Health Maintenance Organization market in Las Vegas, the Justice Department announced Monday.

The resounding announcement came after a year of buildup and left the parties affected by the decision to either celebrate their success or bemoan their defeat.

THUMBS UP:

Some medicare Patients: Medicare Advantage patients will continue to benefit from competition between two companies once Humana takes over United’s stake of 25,000 members.

The outcome isn’t so clear for other patients. Sierra customers benefited from a low-priced health insurance option, and United claims the service will continue. But United could use its dominance to cut back services and pass more costs to patients, critics claim. Fans of the merger point out that Sierra patients now have access to a national network of doctors.

THUMBS DOWN:

Doctors, nurses and hospitals: Sierra was the 800-pound gorilla in Las Vegas, with a reputation for driving a hard bargain and low-balling reimbursement rates. In comparison United is King Kong. United has a slew of regulatory fines in other states and will now dominate an even larger share of the market. The Justice Department did no favors for the merger opponents. So the health care providers will be bargaining with an even more formidable foe.

THUMBS UP:

Sierra and United: Sierra officials said the sale of their company was necessary to ensure Nevadans continue to receive quality health insurance coverage. Plus, they’re going to cash in on the sale. United grows from covering about 200,000 patients in Nevada to about 850,000 — a dominant market share in a growing region of the United States.

THUMBS UP:

Gov. Jim Gibbons: Gibbons’ statements about the merger grew annoying as he tried to please everyone — always urging caution, but never opposing the deal — but he gets credit for calling for the Nevada insurance commissioner to hold hearings so consumers and stakeholders could voice their concerns.

NEUTRAL:

Nevada’s Attorney General: Catherine Cortez Masto negotiated for United to contribute $15 million for health care in Nevada. That seems good, but one investment analyst noted the amount is “pocket change” for United, which faces fines of up to $1.33 billion by California regulators. In her defense, Cortez Masto was primarily responsible for examining antitrust concerns.

THUMBS UP:

University Medical Center: Clark County joined the coalition of merger opponents for the sake of University Medical Center, the county’s only public hospital. More than $7 million of the money obtained by Masto will go to UMC. County Manager Virginia Valentine said the funds will help officials address the hospital’s primary concerns about the merger.