Anthem to buy Cigna

"The company has said the acquisition will help it reduce costs and allow it to negotiate lower prices with doctors and hospitals."
....
Of course it will, it will reduce the amount of competition for the payers, this is horrible. Not for nothing, but doctors are already getting paid low-enough for their service. Speaking of a $15 minimum wage, doctors can't afford to pay their staff $15, receptionist make $12ish an hour, and so do medical assistants. This is only going to make it more difficult for the health care industry, NOT better. Insurance companies are only after one thing, PROFIT.

Here is the full article :

Anthem to Buy Cigna to Create Biggest U.S. Health Insurer

By Ankur BanerjeeJuly 24, 2015

(Reuters) - Anthem Inc said on Friday it would buy Cigna Corp in a deal valued at $54.2 billion, creating the largest U.S. health insurer by membership.

The deal - the biggest ever in the health insurance industry - comes three weeks after Aetna Inc agreed to buy Humana Inc for $37 billion and is part of an industry-wide consolidation following the roll-out of President Barack Obama's healthcare law.

Antitrust authorities are expected to aggressively scrutinize how the combinations will affect competition for Medicare and individual and commercial insurance.

By most measures, U.S. insurance markets are extremely concentrated. That means companies could have trouble selling assets if forced to do so by antitrust regulators.

Anthem said it expects the deal to close in the second half of 2016, indicating a long regulatory road ahead.

Anthem and Cigna are two of just four major insurers that administer self-insured plans for major companies. The other two are UnitedHealth Group Inc and Aetna.

UnitedHealth is currently the biggest U.S. health insurer by membership, while Anthem and Cigna rank No. 2 and No. 4.

"When you go from four to three national players, that creates a significant issue," said Matthew Cantor of law firm Constantine Cannon LLP.

Anthem said it was confident it would get all necessary regulatory and other approvals.

The combined company would have about 53 million members. UnitedHealth had 45.86 million members as of June 30.

Growing concerns about market concentration came into sharp focus earlier this year when regulatory concerns scuttled Comcast Corp's $45 billion bid for Time Warner Cable Inc.

LOWER COSTS

Anthem said it will pay $103.40 in cash and 0.5152 of its shares for every Cigna share.

The deal is valued at $183.36 per share based on Anthem's Thursday close of $155.21.

Cigna shares were up 0.2% at $154.68 in premarket trading, while Anthem shares were up 0.5% at $156.06.

The equity portion of the offer is valued at $49.11 billion, according to Reuters calculations based on 261.2 million Cigna shares outstanding as of March 31.

Anthem said the offer is valued at $188 per share, based on its unaffected share price as of May 28 before reports that the two companies were in talks.

The company has said the acquisition will help it reduce costs and allow it to negotiate lower prices with doctors and hospitals.

The combined company will be led by Anthem Chief Executive Joseph Swedish. Cigna Chief Executive David Cordani will be president and chief operating officer.

Anthem's lead financial adviser is UBS Investment Bank. Credit Suisse also served as financial adviser, and White & Case LLP as legal adviser.

Morgan Stanley is Cigna's financial adviser and Cravath, Swaine & Moore LLP its legal adviser.


Reuters Health Information © 2015

Cite this article: Anthem to Buy Cigna to Create Biggest U.S. Health Insurer. Medscape. Jul 24, 2015.

Anthem to buy Cigna

Things are getting VERY bad with insurance!

Re: Anthem to buy Cigna

Anthem to buy Cigna

This is why private practice as we know it will eventually be obsolete. You already have MDs migrating to ProHealth and NSLIJ owns half of Nassau and Queens. Same with Montefiore in the Bronx and Westchester and NYU and (to a lesser degree) NYP in the city. The doctors get paid, have less overhead and fewer headaches.

By the time we're elderly, we will not have one MD who is not employed by a major hospital.

Anthem to buy Cigna

The last practice I worked for was in private practice for over nearly 30 years, and they just merged with Cornell.

Anthem to buy Cigna

It makes sense- insurance isn't paying what it used to, so private practice MDs aren't rolling it in like the old days- they used to make the big bucks but with reimbursement being so tough that's not the case. It's so much easier for them to be guaranteed a set salary and not have to deal with their own billing, malpractice. But then they're playing by someone else's rules- and often can't keep all their staff, etc. It has its pros and cons for sure.

Re: Anthem to buy Cigna

Part of the health care act has placed a limit on health insurance company profit. Think it's 15centsvfor each dollar. That 15% goes toward overhead, employees, advertising, etc. what other public company has a government imposed limit on profit? They aquire to make their network of doctors larger. Most of us now have enormous health care costs because there are many many many Americans being subsidized right now. It's Health care cost we need to be concerned with.

My c section was almost 15 k before any benefits. Why?

Message edited 7/27/2015 2:04:13 PM.

Re: Anthem to buy Cigna

Message edited 7/27/2015 2:18:44 PM.

Re: Anthem to buy Cigna

Message edited 7/27/2015 2:29:41 PM.

Re: Anthem to buy Cigna

Anthem to buy Cigna

Also, what you are referring to as "profits" are not profit, that's overhead and the costs of running the business, not included in the 15%. Profit is PROFIT, what comes in AFTER those costs are taken into account. I guess my point is, healthcare SHOULD NOT be a publicly run industry. It really isn't, not really, not when you think about it. Not when you think about the subsidies they receive in the way of tax breaks and funding from Medicaid, Medicare (such as Empire BC/BS Mediblue plans), government contracts for government employees, etc.

I understand what you are saying with regards to your family being healthy, but that doesn't guarantee you against genetics, nor does it guarantee you against things like cancer. Does it lessen your likelihood? Sure, but it's no guarantee. It doesn't guarantee against your DC breaking their arm and needing immediate medical attention. I guess because I've been working in the industry for so long, done SO much research on how modern healthcare business and insurance became what it is today, I have a very different view on it all. I also know all costs that are actually part of running a medical practice, and they are far beyond what you would expect.