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What does health care mergers say about the future of Obamacare?

WOAI News radio | 23 July 2016 

Bret Schroeder, healthcare expert at PA Consulting Group, is quoted in an article in WOAI News Radio. The article discusses the implications of the Department of Justice's (DoJ) recent anti-trust lawsuit aimed at preventing two major health insurance mergers on the healthcare industry overall. 

Commenting on this topic, Bret states: "The ACA has already been a catalyst for Merger and Acquisition activity.  In 2009, the year before 'Obamacare' was approved, there were 52 M&A transactions involving hospital groups, for example, in 2009, but by 2012 that figure had ballooned to 107."

Bret continues: "For payers, the current wave of mergers were an expected outcome of the dynamics of the health care industry, including declining revenues, large stranded cost structures, and demographics."

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Bret expounds further, explaining: "If you have, say, three big insurers, and they choose not to participate in the market, then what happens? You already have one that has stepped out, United Health Care is stepping out of the individual market."

Bret concludes: "It think this is evidence that it is not sustainable. What you are seeing is a system that is in trouble, it has been in trouble for a long time.  There are a lot of things that are happening.  The hospitals are merging to protect market share, the insurance companies see that and do the same.  The problem is, there is not one clear solution to this.  We are going to be going through this for a while."

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