In memo to employees, Aetna CEO lauds deal with Humana
Perhaps trying to ease concerns about the company's impending merger with Humana, Aetna CEO Mark Bertolini reiterated the benefits of the deal in an internal memo to his employees, the Louisville Courier-Journal reports.
The news of the $37 billion deal between Aetna and Humana has raised some concerns about the anticompetitive implications of such a large combined company, especially given that the country's other major health insurers also are looking to combine.
In the memo acquired by the Courier-Journal, Bertolini acknowledges that the merger has generated some "noise," but adds that the deal has been generally well-regarded by both companies' employees, political and community leaders, and investors. Also, he notes, the deal with Humana will boost Aetna's Medicare Advantage business significantly.
"With more than 10,000 people becoming eligible for Medicare every day, the opportunity in Medicare Advantage is especially compelling," Bertolini wrote in the memo.
Indeed, while Aetna has been expanding its government business, Humana's far larger share of Medicare and Medicaid customers offers Aetna a chance to quickly build scale in that sector, according to Investor's Business Daily.
"If you're looking for growth, you have to look to Medicaid, Medicare and to a lesser extent the public exchanges," Leerink Partners analyst Ana Gupte told the publication.
Furthermore, Humana's 6 percent share of the pharmacy benefit management (PBM) market could offer Aetna a chance to "make inroads in complementary markets with a lesser degree of regulation," the article notes. That's likely why leaders from both companies, during a call with investors, indicated their desire to create the nation's fourth-largest standalone PBM once Aetna's contract with CVS Health expires.
Fellow health insurance giant UnitedHealth also has ambitious PBM-related expansion plans, saying it plans to create a next-generation pharmacy care business through its acquisition of the company Catamaran, FierceHealthPayer has reported.
How personal healthcare experiences shaped Aetna CEO Mark Bertolini's career
Aetna acquires Humana for $37B
Challenges, benefits abound with Aetna-Humana deal
Deconstructing health insurance merger fever: 3 major issues
Booming Medicare business could make Humana an acquisition target