Medical Assn. Against Merger of O.C. HMOs

ORANGE — The Orange County Medical Assn., the county’s largest trade group of doctors, wants regulators to block the proposed combination of the county’s two health maintenance giants, PacifiCare Health Systems Inc. and FHP International Corp.

The medical group, an affiliate of the American Medical Assn., contended in a letter to the Federal Trade Commission that the combined company would dominate the market for Medicare HMO enrollees in Orange, Los Angeles and San Diego counties.

In the letter, which was sent Thursday, the medical group claimed the merged entity would raise barriers to competing health plans and increase economic pressures on providers.

“You have a merger that will control two-thirds of the HMO senior citizen enrollees in one county,” said Dr. Juan Carlos Cobo of Mission Viejo, president of the group of nearly 2,500 physicians. “You are dealing with a powerhouse that has tremendous control” in contract negotiations with doctors and patient care.

The FTC, which is reviewing the proposed merger, is expected to issue a ruling shortly. An agency spokeswoman wouldn’t comment on the medical group’s letter. The HMOs have contended that the combined entity would not dominate the Medicare market.

The doctors’ letter echoed some of the concerns raised earlier by Consumers Union, the consumer advocacy group that also opposes the merger.

A federal official noted Friday that recent statistics suggest that the combined company wouldn’t be as dominant as the doctors and consumer groups predict. For example, while both say the new entity would end up serving 90% of San Diego County’s 155,000 Medicare enrollees in HMO plans, the two together served 69% as of last September.

Cobo predicted that both the California Medical Assn. and other AMA affiliates in Los Angeles and San Diego will also lodge protests with the FTC.