Aetna's Mark Bertolini, Cigna's David Cordani weigh in on mergers, drug costs
Though they are both pursuing mergers with other companies, Cigna CEO David Cordani and Aetna CEO Mark Bertolini recently expressed very similar ideas about the benefits of health insurer consolidation and the importance of shifting to value-based payment models.
In an interview with Bloomberg's Angie Lau, Cordani (right) provided a counter-argument to insurer merger critics such as presidential candidate Hillary Clinton. He said the two insurers' businesses are complementary, as Anthem's strength lies in the individual business, while Cigna's is in the midsize-employer business, the global employer benefit sector and health engagement initiatives.
Bertolini (left) made a similar point during an interview with Fortune's Susie Gharib, noting that there are 400 health insurance companies in the U.S. and that Aetna's commercial-market focus and Humana's Medicare Advantage dominance means the overlap between the two is fairly small. He also pointed out that Blue Cross Blue Shield plans are the dominant player in 30 states, having more than 30 percent, and in some cases, as high as 70 percent, of the market share.
For his part, Cordani also notes that "the headline says you have five [major insurers] shrinking to three, but the reality is you'll have more choices brought to consumers." Cigna and Anthem's deal, he said, will mean more Medicare, Medicaid, small-business and individual plans are available.
Both Cordani and Bertolini also addressed the hot-button issue of high drug prices, expressing support for the concept of insurers paying pharmaceutical companies for value.
"I think we need to have a much tighter connection between the drug itself and the outcome," Bertolini said, adding that there needs to be a less-expensive way of getting prescription drugs to market. Cordani, meanwhile, touted Cigna's outcomes-based contract with Merck and Gilead for specialty drugs, saying that paying for value is the next evolution in healthcare.
Two pharmaceutical CEOs, however, recently expressed doubts about the feasibility of this model becoming mainstream in the U.S.
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