WellPoint's Glasscock: Expect more consolidation

NEWS IN BRIEF — Posted Jan. 1, 2007

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The leader of the nation's largest private-pay health plan says the age of insurer consolidation is not over yet.

WellPoint CEO Larry Glasscock says even though the top 10 insurers' market control has moved to 50% from 27% in only 10 years, "I think [consolidation] will continue in the future." Glasscock made this statement in an interview posted Nov. 28, 2006, on the Health Affairs Web site. While Glasscock did not specify any acquisitions planned by his company, he said health insurers' ability to reduce costs through consolidation will help drive more deals.

"If you look at other industries, where economies of scale exist, you see more consolidation," he said.

The AMA, in its own market studies, has said virtually all local markets meet the Justice Dept.'s definition of highly concentrated, thus seemingly keeping plans from expanding. However, for the most part, plans have been able to get approval by going into markets where they have little or no presence, and acquiring insurers that already dominate those markets.

Also in the interview, Glasscock said he expects large financial companies -- such as Wachovia or American Express --could become health insurers. Because the companies are moving into the health savings account business, they might want to underwrite accompanying plans.

Note: This item originally appeared at

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