Making Sense of Mergers in the Health Care Industry

Guest: Erik Gordon, PhD, Professor at Ross School of Business, University of Michigan Walmart is rumored to be eyeing the huge health insurance company Humana. CVS pharmacy is buying Aetna insurance. Health insurer Cigna wants to merge with Express Scripts. And a trio of giant employers: Amazon, Berkshire Hathaway and JP Morgan say they’re so fed up with the high cost of insurance they’re teaming up to create an independent company that can provide insurance to their US employees.  Why does combining forces seem to be the go-to strategy in American health care right now?