Barak Richman talks major health insurance merger with Wall Street Journal

Kenan Institute for Ethics Senior Fellow Barak Richman appeared on The Wall Street Journal’s “Opinion Journal” show, where he provided insight and context on the fallout from a federal judge’s decision to block a proposed merger between health insurers Aetna and Humana.

Richman, who also serves as the Edgar P. and Elizabeth C. Bartlett Professor of Law Professor of Business Administration at Duke’s School of Law, noted that a judge overseeing the merger found the two companies were coming together as a way to aggregate monopoly and pricing power.

They wanted to come together to negotiate better prices with providers and they wanted to skirt whatever sort of possibilities of market competition there is, so they can increase prices on consumers. And that really reflects what the primary business model is in insurance right now. It’s to create size and to leverage pricing power, both against providers and against consumers.”

Do today’s insurers need a new business model? See the full interview on the Wall Street Journal website.