Posts Tagged ‘healthcare mergers’

Guest Post: As Mergers Continue, Healthcare Industry Faces New Data Consolidation Realities

June 12th, 2018 by Christian Puff

As if the healthcare system wasn’t confusing enough, construction signs are now popping for consolidations.

As if navigating the twists and turns of the U.S. healthcare system highway wasn’t confusing enough, construction signs are now popping up all over the place in the form of consolidations. Why is this happening? What does this mean for consumers? And, how will this change the way consumers receive care?

The United State’s annual medical spend has risen to over $3.4 trillion and is only projected to grow. This spend accounts for roughly 18 percent of the U.S. GDP. Some want a piece of the incredibly large pie, while others are focused on reducing its size. Then, there are those who have accepted the need for a smaller pie but want the biggest piece possible. It’s in this third group where we’re seeing many of the industry consolidations. From Aetna and CVS to Cigna and Express Scripts and, most recently, Walmart and Humana, these big-name players are intent on controlling the largest portion of the multi-trillion dollar industry they can.

If these consolidations are successful, the way insurers and healthcare providers interact will change because of one word: data. Data is king, and many believe it is the key to reducing healthcare costs in this country.

Aetna is one of the largest health insurers. Its plan to merge with CVS, the largest national retail pharmacy chain that also happens to own the largest pharmacy benefit manager, Caremark, will give the consolidated healthcare giant access to an incredible amount of member, patient and provider data. The same is true for Cigna and Express Scripts, although to a slightly lesser extent. While this consolidated entity would not, at this time, have brick-and-mortar pharmacies, together, they will reap the benefits of combining member, patient and provider data. However, the proposed Walmart and Humana merger could prove the most impressive in terms of data consolidation, followed by Aetna and CVS. Not only will the newly combined company know whether their members and patients fill their prescriptions, they’ll know what those same members and patients purchased while waiting for their prescriptions. Did the depressed, hypertensive diabetic buy ice cream, red meat and cigarettes? They will now have those answers.

So why is this important? According to the Centers for Disease Control and Prevention (CDC), over 86 percent of the healthcare spend is due to those suffering from chronic disease. More importantly, however, is over 50 percent of these costs are attributable to patient behavior. As a result, having access to both medical and behavioral data allows the depressed, hypertensive diabetic purchasing ice cream, red meat and cigarettes to become an opportunity for outreach and case management.

These companies will attempt to capitalize on the data available to them to help manage the cost of care. Perhaps it will be in the form of a letter or phone call to the member. Perhaps it will come in the form of a highly personalized clinical program where the member receives access to nicotine replacement therapy, a gym membership and nutritionist services.

These organizations alone cannot and will not be able to force patients and members into participating in programs designed to improve health and reduce the cost of care.

Okay, so now what? Let’s assume for an instant all of this data conglomeration works to drive down the cost of care to a more reasonable $2.5 trillion. Will consumers benefit from the savings? This is yet to be determined. In reviewing the proposed consolidations, the federal antitrust enforcers will attempt to discern the impact on the consumers. Undoubtedly, these entities will argue the proposed mergers will reduce costs by increasing efficiencies and allowing them to positively affect the medical spend trend. Critics, however, predict individual consumers will never see the savings projected by these organizations. Who’s right? That’s a question that can only be answered with time.

This article is educational in nature and is not intended as legal advice. Always consult your legal counsel with specific legal matters.

Christian Puff

Christian Puff

About the Author:

Christian Puff is an attorney with Hall, Render, Killian, Heath & Lyman, P.C., the largest healthcare-focused law firm in the country. Please visit the Hall Render Blog at http://blogs.hallrender.com/ for more information on topics related to healthcare law.

HIN Disclaimer: The opinions, representations and statements made within this guest article are those of the author and not of the Healthcare Intelligence Network as a whole. Any copyright remains with the author and any liability with regard to infringement of intellectual property rights remains with them. The company accepts no liability for any errors, omissions or representations.

Infographic: Impact of Hospital Mergers

February 10th, 2017 by Melanie Matthews

Hospital mergers between 2009 and 2014 reduced annual operating expenses at acquired hospitals by 2.5 percent, and are driving quality and service improvements for patients, according to a new infographic by the American Hospital Association.

The infographic examines how hospital mergers help drive high-value, high-performing healthcare.

Healthcare Trends & Forecasts in 2017: Performance Expectations for the Healthcare Industry Not in recent history has the outcome of a U.S. presidential election portended so much for the healthcare industry. Will the Trump administration repeal or replace the Affordable Care Act (ACA)? What will be the fate of MACRA? Will Medicare and Medicaid survive?

These and other uncertainties compound an already daunting landscape that is steering healthcare organizations toward value-based care and alternative payment models and challenging them to up their quality game.

Healthcare Trends & Forecasts in 2017: Performance Expectations for the Healthcare Industry, HIN’s 13th annual business forecast, is designed to support healthcare C-suite planning during this historic transition as leaders prepare for both a new year and new presidential leadership.

Get the latest healthcare infographics delivered to your e-inbox with Eye on Infographics, a bi-weekly, e-newsletter digest of visual healthcare data. Click here to sign up today. Have an infographic you’d like featured on our site? Click here for submission guidelines.

Infographic: Taking the Pulse of M&A in Healthcare

July 11th, 2016 by Melanie Matthews

2015 was a record year for healthcare merger and acquisition activity—reaching $546 billion in value, 2.5 times the previous decade’s average, according to a new infographic by Bain & Company.

The infographic takes a look at the major trends in healthcare deals during the past year and how investors can sustain returns in an uncertain market.

Healthcare Trends & Forecasts in 2016: Performance Expectations for the Healthcare IndustryFrom cost pressures, consumerism and consolidation to a proliferation of patient-centered, value-based delivery and payment models, the state of healthcare continues to challenge organizations in the industry.

Healthcare Trends & Forecasts in 2016: Performance Expectations for the Healthcare Industry, HIN’s 12th annual business forecast, pins down the trends destined to impact the industry in the year to come and proposes tactics C-suite executives can employ to distinguish their operations in a dynamic marketplace. Click here for more information.

Get the latest healthcare infographics delivered to your e-inbox with Eye on Infographics, a bi-weekly, e-newsletter digest of visual healthcare data. Click here to sign up today.

Have an infographic you’d like featured on our site? Click here for submission guidelines.