Fitch: Insurer consolidation could accelerate shift toward value-based payment models


Mergers and acquisition among health insurers could have many effects on hospitals in the long term, including advancing the shift toward value-based payments for hospitals and other healthcare providers, according to Fitch Ratings.

Last week, Hartford, Conn.-based health insurer Aetna entered into a definitive agreement to acquire all outstanding shares of Louisville, Ky.-based Humana in a deal valued at $37 billion. This deal is one of several that are in the works between health insurers across the nation.

Fitch believes the for-profit hospital industry is well positioned for the anticipated wave of mergers and acquisitions among health insurers. The deals are "not likely to immediately result in outright price pressure for hospitals," according to Fitch.

However, there could be some longer-term ramifications. For instance, the consolidation of major health insurers could have a negative effect on smaller insurers in some markets.

The insurer consolidation could also accelerate the shift toward the use of value-based payment models if large insurers find these models to be financially beneficial and push for their use, according to Fitch.

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