The health insurance industry will continue to consolidate, WellPoint, Inc. chairman, president, and CEO Larry Glasscock told me in an interview published November 28 on the Health Affairs Web site [2-week free access]. Glasscock also cautioned, however, that health insurers could face new competition from financial services companies.
“If you look at other industries, where economies of scale exist, you see more consolidation. Ten years ago, in our business, the top ten insurers covered about 27 percent of the membership, nationally. Today, the top ten companies cover about 50 percent. In ten years, it has consolidated that much, and I think that it will continue in the future,” said Glasscock.
However, the former banking executive also said that he would not be surprised if a major financial services company “made a serious effort to become a formidable force within health insurance.” Traditionally, financial services companies “have focused on the brokerage aspect of health insurance – finding coverage for their individual and small-group clients – and have stayed away from actually underwriting coverage,” Glasscock said. But “we are seeing some convergence of financial services and health care, driven in part by this whole notion of consumer-directed health plans, health savings accounts, and financial resources that will be dedicated to that.”