The telehealth company MDLive, one of the biggest telehealth platforms in the country, will be acquired by Evernorth, Cigna’s recently rebranded health services unit. The deal is expected to close in Q2 2021. Break out the champagne?
Perhaps a toast is in order if you’re a stockholder in one of those companies. But to us, it’s another indication of a concerning trend that could put providers and patients at a disadvantage: The insurance industry’s growing grasp on healthcare by controlling more and more players.
Modeled on UnitedHealthcare’s impressively profitable Optum subsidiary, Evernorth already boasts a pharmacy benefit manager (Express Scripts), a specialty pharmacy (Accredo), among a range of health service product lines. Cigna attributed much of its revenue growth last year to Evernorth, just as UnitedHealth attributes its abundant earnings to Optum. So, it’s no surprise that Cigna is running the same playbook and going after MDLive. In fact, Cigna has been patiently hovering in the background as an investor since as early as 2018.
Providers need to keep a close eye on this deal, and others like it. From what we’ve seen, insurers are reluctant to reimburse telehealth. If they get a stronghold on virtual platforms as part of their grab to control top-of-funnel services, anything can happen—and it won’t benefit providers.