Recently, we covered an article by HealthcareDive that discussed Optum’s advantage in vertical integration in the health insurance industry. While there is no question that Optum continues to lead the pack, we have seen other major insurers, like Cigna, follow suit. *Cue Evernorth,* Cigna’s health services unit, which includes a pharmacy benefit manager (Express Scripts), a specialty pharmacy (Accredo) and various other health service product lines. While these are not new business lines for Cigna, the Evernorth brand was unveiled in September 2020, making us wonder – why now? Our hypothesis is that insurers feel the need to keep up with the expansion of UnitedHealthcare’s Optum. A vertical integration model increases offerings and adds top of the funnel services, which dramatically expands the reach of insurers into untapped consumer markets. And what does all that produce? That’s right — profits. Cigna attributed its third quarter revenue growth to Evernorth, much like United has attributed its abunant earnings to Optum. We’ve long predicted that insurers would hop on the bandwagon of vertical integration, and this is one more major proofpoint of that trend. It will be important to watch and see what’s next on the insurance industry’s path of vertical integration.
The five most important things to know about Cigna’s newly branded health services unit, Evernorth
On November 17, 2020, Becker's Hospital Review disected Evernorth, Cigna's newly branded health services unit and provided the five most important things to know about it.
