Medical Consolidation

Well, it is happening. With profits high, debt loads low, interest rates near zero and an economy on the mend, large corporations have huge stashes of cash. Trillions, you know. So what to do with it? Buy other companies, usually competitors, and then make more money in the same market.

This happens in many industries. None more at this time than in the medical insurance industry. Anthem is the latest corporation to buy a competitor, this time Cigna. Both are very large. The deal alone is worth nearly $55 billion. That’s a B, folks.

Other large deals? Well look at hospitals. In urban areas more and more hospitals are eyeing each other and buying up the competition. Then they partner with major clinics and medical schools with specialty credentials, and competition in urban areas heat up all the more.

In Suburban Chicago little old Glen Ellyn Clinic (Glen Ellyn, Illinois) is now the DuPage Medical Group. It is enormous. Many of its offices are like mini hospitals and able to care for most medical specialties. But if they can’t, wait a moment! Help is just a few miles away at yet another facility they own and operate. The DMG is very good at what it does. I’ve been their patient for nearly 44 years and do not feel like a small bit lost in a large forest.

Currently, the western suburbs of Chicago is served by Cadence Health, Edward Health, and Copley/Rush (another partnership/merger?). Edward is taking the market territory to the southwest of them, and Cadence is taking the market region to the west and marking its brand to the southwest and northwest to fit between competing large market competitors.  The landscape for hospitals is being carved up.

Cadence is now a conglomerate of Central DuPage Hospital, Elmhurst Hospital, and Northwestern Hospital. Children’s Memorial Hospital and the Cleveland Heart Clinic also are partners in the Cadence family of medical practitioners. Amazing medical talent and power combined to serve the public. It is good for patients, too!

So, clinics are merging. Hospitals are merging. And of course medical insurance companies are merging. Soon it may come to a single payer insurance system? One can only hope! Think of the savings, the overhead, the marketing savings, and the re-focus on patient care and delivery of services.

Perhaps we will eventually arrive at a single provider organization, too? Again, we can only hope.

The medical industry is enormous in America. It is the core installation of global health as well, exporting much of its pharmaceuticals and medical equipment to other providers throughout the world community.

Now research continues to be diversified in universities and drug company labs scattered over a broad landscape. Although much is accomplished in North America, so too are gigantic efforts expended throughout Europe, Asia and Australia. We can only hope that their competition is not wasted on duplication but collaborative discovery. If the former, consolidation will occur naturally to save resources.

I know there is serious opposition to single payer health insurance. It smacks of socialism to capitalists. The trouble is that capitalism has proven to be very costly and wasteful. Same with the drug companies. We value their risk-taking and research. But we still wonder what is the proper about of reward for discoveries which benefit mankind but reward a few with unending wealth? What balance in that formula should exist?

In talking with people from other parts of the world, I have learned that their societies are much more interested in quality of life issues than in personal wealth and power that America endorses so dearly.  They argue that what we think about, what we smell, taste and feel are more important than money alone.

I think they have a point we need to understand better. After all, we come into this world one at a time and with no personal wealth whatsoever. We leave this world in the same condition – one at a time and with not wealth whatsoever.

Isn’t it about time that our lives become enriched with what matters than that which doesn’t?  We need to ask ourselves, how much is enough? How much is just right?

The exercise of discussing this might just be worth more than the conclusions gathered by it. Perhaps we should engage in this?

July 27, 2015