Over the past few years, the healthcare supply chain in the United States has been undergoing intense consolidation. Hospitals networks are buying physician practices. Large physician practices are acquiring smaller practices. Even insurance companies are buying medical clinics. United Healthcare purchased DaVita Medical Group in December 2017, and, CVS is in the process of purchasing Aetna.
Wal-Mart is considering purchasing Humana, and even Amazon has entered the healthcare fray by hiring several new high-powered healthcare executives and physicians to lead their healthcare revolution.
All this consolidation begs the question, “What impact will this have on cost and quality in the healthcare delivery system?” Why would Amazon and Wal-Mart venture into the healthcare space without the expectation of a significant return on their investments?
Too much consolidation in any industry limits competition, causing prices to increase. Health insurance carriers have already seen record profits over the past 10 years, at the expense of employers and families. It will be interesting to see what impact Amazon and Wal-Mart will have on the healthcare industry, but few expect prices to come down. Read more about consolidation in the healthcare industry here.
One thing is certain: more change is coming. As industry consolidation continues, the healthcare delivery supply chain will become more and more important as employers work to control healthcare costs.
Ultimately, employers must take control and demand change to keep costs down and to stay competitive. There are more options than raising deductibles and lowering benefits to lower premiums. There are solutions.