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Business

Is billing consolidation a good thing?

The agreement by WellPoint to sell its pharmacy benefit unit to ExpressScripts for $4.68 billion may be the first of several deals leading to consolidation in medical billing. Good thing or bad thing?
Written by Dana Blankenhorn, Inactive on

The agreement by WellPoint to sell its pharmacy benefit unit to ExpressScripts for $4.68 billion may be the first of several deals leading to consolidation in medical billing.

The Wellpoint unit was known as NextRX.

I don't have a stake in this business yet. I still have a friendly local pharmacist. I still get my prescriptions scribbled by hand. Sometimes the pharmacist calls the doctor because of bad handwriting. Recently he called to renew my prescription after I forget to hand him the script.

But consolidation in this space can save patients money and cost people jobs. As with any consolidation there are redundancies. One man's cost is another man's work.

The question is to what extent this is a good thing. Let's start with reasons why it is a good thing:

  • Get rid of useless duplication.
  • Make it easier for government to coordinate on technical issues.
  • Lower the prices of medications.

Let's look at why it's a bad thing:

  • Insurers gaining control of the drug sales channel.
  • Patients losing access to trained pharmacists.
  • With consolidation savings might flow to the few remaining players, creating monopoly profits.

These are the kinds of questions that must be sorted as consolidation accelerates in anticipation of health care reform (or some type) being passed later this year.

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