We have been following the news stories that involve the merger of major healthcare insurance providers. Over the last year or two, there have been significate consolidations in the medical insurance industry. As a company, ABCS RCM provides medical billing and credentialing services to a wide variety of medical professionals.
With this in mind, we naturally want to stay informed about major changes in the overall healthcare industry. One of these changes that we have been following is the growth of UnitedHealth Care (UHC). This insurance provider has experienced legal trouble with the Medicare and Medicaid, but this has not stopped UnitedHealth Group from expanding.
UnitedHealth has adopted a retail approach to healthcare. In recent years they have acquired a collection of doctor practices, urgent cares, ambulatory surgery centers as well as locally-based community health clinics. This growth will continue due to the fact that UnitedHealth Group’s Optum health services have agreed to purchase the DaVita Medical Group for a hefty $5 billion.
The sale of this medical group to Optum expands their healthcare presence in the states of California, Colorado, Florida, Nevada, New Mexico and Washington. This purchase alone will add another 300 healthcare clinics that annually treat roughly 1.7 million patients.
However, UnitedHealth will have competition. One of the insurance provider’s main rivals is CVS Health. As a company, CVS has roughly 9,700 pharmacies and 1,100 Minute Clinics. In addition, CVS may combine with Aetna, which is the nation’s third-largest healthcare provider. Aetna alone has roughly 22 million customers.
This $69 billion merger would combine the third-largest health insurer, with the largest US-based drugstore chain. A merger that has some healthcare advocates and researcher concerned. The fear is that this merger, and others like it, will basically create a monopoly in this sector of healthcare. So prices may increase for consumers, while the quality of care decreases. CVS has denied this and has stated that this merger will allow them to deliver healthcare services and products more efficiently.
UnitedHealth Group will continue to expand whether or not Aetna and CVS Health combine. As of the end of 2017, UHC’s profits are up. Part of this profit increase is due to the most recent tax bill that was passed by Congress. The new tax bill is anticipated to grant UnitedHealth Group a $1.7 billion increase in earnings.
However, UHC’s profits are not all due to the latest tax bill. The insurance giant did grow the size of its consumer base in 2017. This fact, when combined with the new tax bill, allowed UnitedHealth Group to more than double its profits by the end of 2017.
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