/ Print /

  • linkedin
  • Increase Font
  • Sharebar

    The Anthem-Cigna merger: 10 things to know

    Anthem’s acquisition of Cigna is being called the first “merger of titans” by industry watchers.

    Read: The Anthem-Cigna deal: What's behind the consolidation?

    The forces of consolidation are well under way and the merger was not totally unexpected—all of insurance is going through similar consolidation, according to Munzoor Shaikh, a director in West Monroe Partners' healthcare practice.

    “Healthcare insurance business is not the best today in terms of return on capital,” Shaikh says. “We see this as a trend in consolidation toward an oligopoly system. The U.S. healthcare system is averse to a single payer system—monopoly—and we see an oligopoly as an alternative equilibrium point.”

    Read: Aetna-Humana acquisition: What executives should know

    John Santilli, partner, Access Market Intelligence, a company of thought leaders, innovators and advisers, agrees.

    “The consolidation of the health insurers market has been inevitable as a result of the [Affordable Care Act (ACA)] as the companies seek to gain greater scale to capitalize on growing opportunities in the government and individual markets and reduce costs,” Santilli tells Managed Healthcare Executive. “The ACA has increased revenues for health insurers but has also increased profit margins as the movement toward pricing transparency has grown and funding for government plans has decreased.”

    The employer-sponsored commercial segment is the strength of both Cigna and Anthem, according to Santilli. “However, each company focuses on different employers. Anthem’s focus is on local employers, with the majority of members located in the headquarter state of the employer. Cigna’s focus is on employers with employees spread across multiple states. Along with increased membership, the merger should help the new company with integration issues in multistate employer accounts.”

     

    NEXT: How the merger will benefit the payers

    1 Comment

    You must be signed in to leave a comment. Registering is fast and free!

    All comments must follow the ModernMedicine Network community rules and terms of use, and will be moderated. ModernMedicine reserves the right to use the comments we receive, in whole or in part,in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

    • JUSTINDJENKINS
      The Article is so far informative and valued. love the inside techniques and writing ability. FilmStarLook Gillian Anderson Yellow Jacket

    Follow Us On Twitter

    Find us on Facebook

    Latest Tweets Follow