Merge, Acquire, then Repeat

With all of the statements that have been made about healthcare this year, one of the most compelling we’ve heard came from Aetna’s CEO, Mark Bertolini, during the HIMSS12 conference when he decisively proclaimed, “the end of insurance companies, the way we’ve run the business in the past, is here.”

The activity we have seen recently in the area of Mergers and Acquisitions (M&A) and formation of strategic partnerships indicates that Bertolini is not alone in his evaluation.  We are finding significant examples of payers seeking to transform the way they do business by expanding their capabilities and streamlining their care delivery through M&A and related activities.

M&A activity examples recently in the news:

  • Expanding Data and Analytics Capabilities:  Humana acquired Anvita Health, a leading health care analytics company
  • Enabling Accountable Care Organizations:  Aetna acquired Medicity, a health information exchange company
  • Acquiring Medicaid Market Presence:  McLaren Health Plan acquired CareSource Michigan to increase Medicaid and dual eligible Medicare-Medicaid membership
  • Augmenting Direct to Consumer Capabilities: WellPoint acquired 1-800Contacts, a direct to consumer contact lens and glasses supplier

 

Strategic Partnership examples recently in the news:

  • Leveraging Information Technology for Enhanced Go to Market Strategies: TriZetto, Blue Cross and Blue Shield of Kansas City, and Blue Cross and Blue Shield of North Carolina have jointly developed  Topaz Shared Services
  • Creating Integrated Delivery Networks: Abington Health has joined with Independence Blue Cross for an Integrated Provider Performance Incentive Plan
  • Expanding Relationships Between Public and Private Organizations: Humana formalized a partnership with AMVETS to be the exclusive health insurance partner

 

For our part, the West Monroe Partners Healthcare Payer team has been extremely busy working closely with various M&A work.  Through our work, we have created a Merger and Acquisition Playbook for Healthcare Payers, which captures our methodology for executing mergers from an operational and IT perspective.  Look for more about our Merger and Acquisition playbook in future postings.  In the meantime, we would love to hear from you!  Do you think it’s the end of insurance as we know it?  What are your predictions for how healthcare will look in 5 or 10 years?

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Phone: 312-602-4000
Email: marketing@westmonroepartners.com
222 W. Adams
Chicago, IL 60606
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