U.S. Healthcare Financing Reform: The Consolidation of the Health Insurance Industry

Eldon Van Der Wege, MBA and
Thomas Billroth Gottlieb, MD

In this study, we propose the US health insurance system should be consolidated using a mergers and acquisitions strategy to reduce the current inequality and administrative inefficiency in health care. We estimate the cost to federal Government of acquiring the entire private health insurance industry at $714 billion, using the enterprise value, market share, and financial characteristics of commercial health insurers. We estimate the associated payback period at two years. We use these findings to argue that consolidation would be the most effective method of achieving affordability, equitable access, and cost savings in healthcare.

We believe that our study has significant policy implications for healthcare reform. We further believe that in today’s political climate of health care reform that this alternative financial business proposal will result in higher quality services at a reduced cost and healthier communities.

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