Intelligencer October 11, 2018
The average customer might benefit.
When two large and similar health care companies merge, the economic story tends to be pretty simple: They use their added power in the market to increase prices and profits. Consumers come out behind. At least this is true of horizontal mergers, like when an insurer buys an insurer or a hospital system buys a hospital system.
But vertical mergers between companies that make up different links along the health-care chain — like the just-approved merger between the pharmacy retailer CVS and the insurer Aetna — are more likely, under the right conditions, to produce benefits for consumers.
“I think the biggest source of optimism is on the cost side,” says Austin Frakt, an associate...
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