The biggest news in U.S. healthcare over the past few weeks has been a series of proposed mergers between a range of giants in the health, benefits and wellness markets.
Perhaps the most talked-about event has been the potential merger between Aetna and Humana. If approved by federal officials (and approval is far from certain), the combined firm could help drive down health spending by 2017. On the other hand, the merger could reduce competition and lead to higher health insurance premiums as the new firm seeks to remain profitable in the wake of increase claims generated, in part, by the Affordable Care Act (ACA).
Another interesting deal involves CVS Health and Target. CVS, which is continuing its years-long quest to reposition itself as a health company, plans to acquire Target’s pharmacy business. This will increase CVS Health’s ability to provide customers with end-to-end health services, from doctor’s visits to medication delivery to adherence programs.
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While many have focused on the potential of these mergers to increase the scale and profitability of these firms, there’s another important factor driving this activity: the quest to shape health behavior in order to decrease the prevalence of expensive conditions like heart disease and keep people out of the hospital. This focus has been driven by the ACA, which has made prevention and value-based care a high priority. Leaders are recognizing that influencing health at a massive scale requires access to millions of patients, robust data sets and humans who can react to changing circumstances and boost efficiency.
The consolidation in health will also accelerate a mega trend I introduced a few months ago called the TechnoWellness Revolution. This refers to the rise of a new breed of wellness solutions that combine data, devices, analytics and, importantly, human experts to shape positive health behaviors. Let’s talk about each of these elements in turn.
Let me be clear: bigger isn’t always better. For example, with investors pouring billions into health startups, there may less opportunity for innovation as the overall customer pool diminishes and large firms are incentivized to limit disruption in certain areas. But, in an era where prevention and prediction are becoming more important TechnoWellness-related solutions that can reach and improve the health of millions will become increasingly valuable and ubiquitous.