As other major insurers await approval of their mergers, Philadelphia-based Independence Health Group is examining its options for collaborating or consolidating with other companies, according to an article from the Wall Street Journal.
In the past, some nonprofit Blue Cross Blue Shield (BCBS) companies have merged to become for-profit. Yet it isn't clear if Independence Health Group--the parent company of Independence Blue Cross--would be able to become publicly traded. Formal talks surrounding a merger aren't currently scheduled, but Independence gathered as many as 10 nonprofit BCBS insurers in December and January to discuss combining some operations to share costs and otherwise collaborate, according to the WSJ.
Independence had $13 billion in revenue in 2014, though it is facing mounting competition amid the pending Anthem-Cigna and Aetna-Humana mergers. The BCBS companies also are facing the financial burden of losses on the Affordable Care Act exchanges, and are dealing with push-back from hospitals and other healthcare providers that are gaining more leverage in negotiating rates due to their own consolidation.
Independence would also face obstacles if it decides to pursue mergers with other companies. The WSJ points out that a previous attempt to combine Independence Blue Cross and Highmark was called off in 2009 after Pennsylvania regulators raised concerns the deal would hurt competition in the state.
Independence Health Group CEO Dan Hilferty told the WSJ that the company is "committed to collaborating and partnering with other leaders in health care, including our fellow Blues." He added that Independence is continuing to "explore all possibilities that can improve the health and wellness of the members we serve."
To learn more:
- read the WSJ article