Editor's Corner

This week's big news is the continuing consolidation in the health plan market. Pacificare, a big regional California-based HMO, was swallowed by UnitedHealth. Meanwhile, the result of the Wellpoint-Anthem merger has essentially been the coalition of all the for-profit Blues plans. Thus far almost all of these mergers have been plans in different regions merging with each other. But healthcare markets are local. For the last decade hospitals have merged on a local basis and have used their local and regional bargaining power to turn the tables on health plans and take the upper hand in pricing negotiations. Health insurers have done fine financially as they have passed along those increases to their customers. But the next act in this play will be more regional health plan consolidation, which may cause more contentious pricing negotiations in coming years. - Matthew