Monday, February 08, 2010
Health insurance Borg seeks more consolidation
Because their current control over Congress and the 50 states is pretty good but not yet complete. A few well placed mergers and the whole world will have top deal with companies bigger than the US government.
With Congress’ sweeping overhaul of the health system stalled, industry will seek its own answers to a push by government and the private sector to rein in costs, said Curtis Lane, senior managing director at MTS Health Partners, a New York-based equity fund. An aging U.S. population will spur demand for services and, at the same time, boost pressure to control spending, he said.When the Borg speaks of costs, they are not referring to the cost to the consumer, but the expenses that come between the Borg and the profits promised to Wall St. Doctors may see tougher negotiation on price, but the main effort will be to preclude expensive customers from the benefits promised when they took the customers money. Silly people, don't they know benefits are for executives.
One solution will be increased consolidation, with companies led by WellPoint Inc., the biggest U.S. insurer by enrollment, and Community Health Systems Inc., the largest publicly traded hospital chain, scooping up rivals unable to “spread rising costs across fewer customers,” said Paul Keckley, of the Deloitte Center for Health Solutions.
The health-care market “certainly seems to favor bigger, innovative, scalable companies,” said Keckley, executive director of the Washington-based center, in a phone interview. Drugmakers facing the loss of patent protection on top-selling medicines “were looking at decelerating revenues, with or without reform,” he said.
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