A Season of Mergers
Over the past few years a number of odd partnerships have formed between leading companies from different industries. Most notable among them might be Amazon’s acquisition of first the Washington Post and a bit later Whole Foods. It doesn’t take a professional cynic to see that more appealed to the corporation than plain intrigue about the grocery business or recommitment to the integrity of investigative journalism during a period when the freedoms of that institution seem in jeopardy.
Such ventures provide, or at least suggest the hopes of providing, some kind of future asset to the company absorbing them. On the one hand Whole Foods gives Amazon crucial data on the shopping habits of an affluent and targeted consumer population—the silver lining should be clear enough here. As for the newspaper business, historically a print medium slow to assert its place in an increasingly web-centric era, the procurement laid a foundation for Amazon to apply its unparalleled expertise in The Internet of Things (IOT) to an antiquated media platform.
In recent months, and perhaps with more cause for suspicion, there have been a series of mergers between the mammoths of the medical insurance industry and their equivalents in the pharmaceutical field—Cigna and Express Scripts, UnitedHealth Group and OptumRx. And just last month the Justice Department approved Aetna’s $69 billion acquisition of CVS Health granted Aetna divest of its private Medicare drug plans. However, this deal remains under review as a federal judge raises questions.
For many these mergers mark more tenuous ethical ground. Whereas Amazon’s eclectic side-projects are geared, ultimately, toward consumer satisfaction and profitability the consolidation of a large insurance company like Aetna, with $60 billion in revenue in 2017 and 22 million people on its health plans, and a large pharmaceutical house like CVS, with $185 billion reported revenue last year and 94 million customer prescription plans, further centralizes power in an industry that lacked competition and transparency to begin with.
While Aetna and CVS, and the long list of other insurance and pharmaceutical companies that have recently struck up partnerships, cite a diversifying industry as catalyst for the mergers, many outside the industry fear that the partnerships will harm patients in two central ways: (1) they will have even less oversight and control in the pricing of drugs and care, and (2) those with Aetna insurance plans (or Cigna etc.) might be confined to CVS retail clinics and consumers without Aetna care might face yet higher drugs costs. But advocates of the merger claim just the opposite, arguing that with the diversification the two industries can pool resources in an effort to better address patients’ needs.
To get behind the advocates of the mergers is no easy feat: the insurance industry has had a persistently poor reputation for a while now and largely well-deserved and due to its years of shameless denying of care to those with pre-existing conditions, its stinginess toward both doctors and patients, its fatal refusal of crucial and effective treatment plans for patients with rare cancers and other survivable diseases, amid countless other questionable practices. And the pharmaceutical people have fared little better in recent years: while the nation got hooked on its supposedly non-addictive drugs and started perishing in the streets the distributors boasted record profits.
People tend to get grouchy over such disparities, and that these two misbehaving conglomerates, on which we all, for good or ill, must rely, have decided to form such a brazen compact, should, with due reason, give us pause. But maybe we should do just that: maybe we should reserve judgment until full appraisal of what these partnerships might mean for the often uncourted and well-paying patients unfolds. And in the immortal words of the English poet Philip Larkin, for better or worse, “We shall find out.”