Every year, the health care industry behaves more and more like a balloon: Squeeze one side, and the other expands. Companies that were once just insurers or just pharmacies are tacking on new business lines. The idea is that when profit inevitably gets squeezed in one, it’ll expand in another.
That trend of vertical integration was on full display in 2023, a year when the country’s biggest pharmacy chain bought a primary care provider, and the biggest private insurer branched further into home health. It’s no coincidence margins are being tested in both of those companies’ core businesses.
Hospitals, meanwhile, continued to push the boundaries of empire expansion — their leaders following through on their promises to grow market power. They continue to say scale is the best remedy for anemic revenue growth.