Wednesday, August 29, 2018

Is consolidation in health care good for employers?

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CVS’s proposed deal with Aetna has received a lot of attention. If the deal goes through, experts believe patients could end up paying more, not less. A company with such leverage will make it challenging for new organizations offering insurance coverage to enter the market and compete.

Furthermore, many employers and other health care purchasers have enjoyed the flexibility of offering medical benefits and pharmaceutical benefits to their members through separate companies. By keeping medical benefits and pharmaceutical benefits separate, employers and other purchasers have been able to shop around, gaining leverage as competitors know prospective customers have multiple choices.

Without the option to offer these benefits separately, purchasers will have to look for which singular health plan offers the best combination of medical and pharmacy benefit management. This might leave them compromising on one to ensure the other meets their needs.

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