Hi there and completely satisfied hump day, readers.
It might seem that the well being care consolidation development is right here to remain.
On Wednesday, well being insurer Centene (#61 on the latest Fortune 500 checklist and an enthusiastic believer within the Reasonably priced Care Act marketplaces) introduced plans to grab up rival WellCare in a deal valued at greater than $15 billion earlier than debt.
“With the addition of WellCare, we count on to bolster and diversify our product choices, improve our scale and have entry to new markets, which can in flip, allow us to proceed investing in know-how and higher serve members with revolutionary packages designed to fulfill their wants,” mentioned Centene CEO Michael Neidorff in a press release.
That signifies that Centene (if the deal clears) shall be getting considerably greater. However the medical health insurance and advantages supervisor market itself will proceed to get smaller after the company marriage, with much more energy concentrated amongst a number of main gamers.
Take into account the giants not too long ago produced by the CVS-Aetna deal, the Cigna-Specific Scripts deal, UnitedHealth’s large attain throughout its Optum and conventional insurance coverage items, amongst different latest well being care M&A. Well being care corporations are leveraging vertical and horizontal integration methods alike, snapping up corporations which can be in their very own enterprise and at completely different hyperlinks within the provide chain alike.
The businesses would argue that this may each increase their backside traces whereas serving to shoppers, because the seek for scale can, in the end, minimize prices. Whether or not or not that performs out in actuality is a really completely different query.
Learn on for the day’s information.