The merger of health care insurers Anthem and Cigna, for an estimated $54.2 billion, continues the consolidation of the health care insurance industry into fewer and larger companies that will dominate the industry in the days ahead. The combined company would cover about 53 million members, making it the nation's largest health insurer by enrollment. The deal is expected to close in the second half of 2016.
Cigna, formerly based in Philadelphia (until 2011), still has about 1,000 employees in the city. It is now headquartered in Bloomfield, Connecticut.
Indianapolis-based Anthem, formerly known as Wellpoint, is the largest for-profit managed health care company in the Blue Cross and Blue Shield Association. It has members in Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, Ohio, Virginia and Wisconsin. Under the Wellpoint name, the company was the major acquirer of Blue Cross/Blue Shield companies after they shed their non-profit status.
In another major health insurance merger, Connecticut-based Aetna will acquire Humana for a reputed $37 billion. Aetna is the second largest health insurer in the Philadelphia region after Independence Blue Cross.
These and other combinations in the health care field are supposedly due to changes under the Affordable Care Act that include a shift away from fee-for-service medicine to a population health system that rewards providers for keeping groups of patients healthy and out of the hospital. No one mentions profits.
Mergers also continue on the health provider side of the industry in the Philadelphia region as Abington Health and Thomas Jefferson University and Hospitals inked a deal and Lancaster General Health is in the process of joining the University of Pennsylvania Health System. Crozer-Keystone Health System in Delaware County and Aria Health in Philadelphia and Bucks County also said they are considering a merger.
In South Jersey, Atlanticare is in the process of allying itself with the Geisinger Medical Center of Danville, Pa., which has the reputation of being one of the best health care providers in the country.
In all of these and other mergers occurring nationwide, health care providers are combining to be in a better position to deal with the health care insurance companies. which wield enormous power. The providers seem to have adopted the Marine Corps mantra of "strength in numbers."
The same holds true for health care practices, which have been merging for many years in order to cut a better deal with the insurance companies and providers. It's a shame that patients and those who buy health care insurance can't figure a way to make themselves more competitive collectively in the health care market.
Beau Weisman, Editor