Major health insurers, including Aetna, Humana and WellPoint, are retooling and diversifying to reach beyond the health insurance sector in the wake of the federal healthcare overhaul that is changing the industry's core business.
Diversification plans include stepped up acquisitions and partnerships allowing insurers to employ doctors directly, deliver health information technologies and participate in accountable care organizations.
At Aetna, CEO Mark Bertolini is implementing a strategy to invest in health information technology and run the back-end operations of the new accountable care organizations. "Our core business is necessary but not sufficient," says Bertolini. He pledged to transform Aetna into "more than an insurance company."
Michael McCallister, Humana's CEO, is getting into the business of employing doctors and is eyeing home care. "These areas are growing faster than the core and will continue to do so," McCallister said. Home health can be beneficial for an insurer because it keeps patients at home instead of at costly nursing facilities.
Meanwhile, WellPoint earlier this year said it is diversifying more heavily into consumer-oriented and health IT businesses. Chief Financial Officer Wayne DeVeydt said "WellPoint is actively engaged in a range of partnership discussions with leading technology and consumer companies to redefine health IT."
However, reinventing the health-insurance industry has its challenges. Diversification "may take away management focus from the core business and also [runs] the risk that they may not do well in some of these newer areas," notes Matthew Borsch, a Goldman Sachs analyst.
To learn more:
- read the Wall Street Journal article