Media Tip Sheet: Cigna, Humana in Talks of Major Merger

WASHINGTON, Dec. 4 -- George Washington University issued the following news:

Cigna and Humana are in talks of a major merger that would be a shakeup in the health insurance industry, The Wall Street Journal is reporting. It's unclear at this time what the terms of the deal would be, but the WSJ says the companies are discussing a stock-and-cash deal that could be finalized by the end of the year.

Richard Ricciardi is a professor in the School of Nursing and the executive director for the Center for Health Policy and Media Engagement at the George Washington University. Prior to joining GW, Ricciardi served as the Director of the Division of Practice Improvement and Senior Advisor for Nursing at The Agency for Healthcare Research and Quality. He maintains a part-time clinical practice at Mercy Health Clinic serving underserved populations.

Ricciardi shares his thoughts on just some of the pros and cons of a potential merger.

"These type of large corporation mergers in healthcare payers/insurers can lead to both positive and negative consequences to the public, such as:

Corporate mergers may lead to cost savings for the merged companies, which could potentially result in lower operational expenses, which may be passed on the consumers and result in lower premiums; however, mergers could also lead to increased market concentration, reducing competition, which may give the merged entity more pricing power, potentially leading to higher premiums for policyholders.

Corporate mergers may lead consumers to a larger network of healthcare providers, offering more choices to policyholders and potentially improving access to healthcare services; however, mergers could also lead to the consolidation of provider networks, which might limit choices for policyholders and potentially affect access to certain healthcare providers.

Corporate mergers could lead to improved efficiency and streamlined services, which might enhance the overall customer experience for policyholders; however, the integration of different systems and processes during a merger could initially lead to disruptions and challenges in service quality.

The merger of two large health insurers may lead to health system restructuring, which could be an opportunity for advancement of employees or it may include layoffs, relocations, or changes in job roles.

Corporate mergers may improve interoperability and technological resources and expertise; however, there could be a period of adjustment during the integration process where technological disruptions may occur, affecting the patient/consumer experience.

It's essential to note that the actual impact can vary based on the specifics of the merger, the regulatory environment, and how the merged entities manage the transition. Additionally, the long-term effects may take time to become apparent. Public and regulatory reactions to healthcare insurer mergers often depend on how well the companies navigate these potential challenges and how much they prioritize the interests of policyholders."

If you would like to speak with Prof. Ricciardi, please contact GW Senior Media Relations Specialist Cate Douglass at [email protected].

-GW-

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Original text here: https://mediarelations.gwu.edu/media-tip-sheet-cigna-humana-talks-major-merger