Fitch: US Hospitals Well Positioned for Insurer Consolidation
Thursday, 07 09 2015, Category: Insurance and Reinsurance, Country: United States
The for-profit hospital industry is well positioned with respect to the anticipated wave of mergers and acquisitions (M&A) amongst the largest for-profit health insurers, but consolidation could have some important longer term ramifications, according to Fitch Ratings. M&A amongst health insurers is not likely to immediately result in outright price pressure for hospitals. In many markets, health insurers are already fairly consolidated and recent actions by hospitals to build market presence will shore up negotiating power. However, over the longer term it could have a negative effect on competition by smaller insurers in some markets. In addition, it could accelerate the nascent shift towards value based payments for hospitals and other healthcare providers if larger insurers find it financially beneficial to advance the use of these payment models. The planned tie-up of Aetna and Humana could create the second largest national for-profit health insurer by revenue if approved by anti-trust regulators.