Rumors now mainstreamed into press surround Aetna’s apparent interest in fellow insurers Humana and Cigna. Forbes last Friday started the ball rolling with an article last Friday focusing on the main event driving insurance payer consolidation: the transition of Medicare from fee-for-service to value-based bundled payments and accountable care organization (ACO) models. Humana has substantial Medicare business and a foot in home care (SeniorBridge), but has innovated in digital health: partnerships (Healthsense, TTA 20 Dec 13), purchases (what remained of Healthrageous, TTA 16 Oct 13), employee wellness (Vitality) and app development. Cigna is a major insurer with corporate business, but has struggled a bit in the digital health arena with the flashy-but-flopped patient engagement platform GoYou. It’s piloted telehealth to reduce readmissions with Care Innovations [TTA 7 Oct 14] and Coach by Cigna, a mobile health platform in conjunction with Samsung for the Galaxy S5 and S6 phones.
Aetna has had some success with working with ACOs, with 62 contracts covering about 1 million lives, but this Editor counts over 400 practice-based ACOs in the Medicare Shared Savings incentive program alone. Their experiment in consumer app aggregation, CarePass, came to a quiet end last August and Healthagen, their ’emerging businesses’ unit, has had some swerves in rationale including iTriage and even ActiveHealth Management, their long-time population health analytics arm. While digital health is part of it (see Mobihealthnews), the real drivers of consolidation, other than Medicare, are the health IT informatics and analytics at scale needed to implement all that population health management to lower cost. Insurers can’t crunch, in present state, all the data from telehealth or fitness trackers. And ACA exchange plans have been a mixed source of revenue. While they brought millions of customers into insurance, many of them came from (contracting) corporate plans, and insurers lack real control over exchange insurance. In addition, the escalating cost, especially without subsidy, is an incentive for some (often the healthiest) to drop it entirely and pay the tax penalty–a factor that will spool out over the next few years and require its own reforms. The real money is now where Optum is–consulting, providing care management, wellness and technology services to hospitals and large practices which don’t have to be ACOs, with insurance just another line of business.
Another hurdle is how the Feds will look at this from an antitrust perspective, especially an Aetna-Cigna match. There is so much governmental involvement (state as well as Federal) versus only a few years ago that one can anticipate that a merger would be hotly debated.
This Editor is waiting for another shoe to drop–a massive consolidation of ‘The Blues”, the Blue Cross-Blue Shield non-profits which are still regional or single-state insurers.