The Anthem-Cigna Merger: A Post-Mortem

Editor’s Note: Watch Health Affairs for the new issue release with a special focus on market concentration at 4 pm. On May 12, 2017, Anthem Inc. announced that it would no longer seek to acquire Cigna Corporation, putting an end to a two-year saga that reached its climax in February when US District Court Judge Amy Berman Jackson sided with the Department of Justice (DOJ), which argued that the deal violated Section 7 of the Clayton Antitrust Act. A divided panel of the Second Circuit Court of Appeals affirmed this decision in April. The DOJ had reason to be skeptical when Anthem and Cigna announced their intention to merge in July 2015. Anthem is the Blue Cross and Blue Shield Association licensee in 14 states and, after United Healthcare, the nation’s second-largest insurer by enrollments. Cigna is the fourth-largest insurer and does substantial business in Anthem’s territories. I am currently the Walter McNerney Distinguished Professor of Health Industry Management at Northwestern University’s Kellogg School of Management. I had the privilege to serve as the DOJ’s economics expert in this matter. Unless otherwise indicated, the courts accepted the arguments I made at trial. My opinions do not necessarily represent the views of the DOJ. Key Issues That Emerged During The Trial The DOJ and the Federal Trade Commission have established Horizontal Merger Guidelines (HMGs) laying out the economic issues for merger analysis. These are the key elements in the HMGs t...
Source: Health Affairs Blog - Category: Health Management Authors: Tags: Featured Insurance and Coverage Anthem Cigna Collaborative Accountable Care Innovation Source Type: blogs