Two of the region’s corporate giants — one focused on government health insurance, the other specializing in communities for seniors — were acquired by larger industry players last week, as consolidation heats up in health-related sectors.
Insurance giant Aetna announced it will buy Bethesda-based Coventry Health Care, which provides Medicare and Medicaid services, for $5.7 billion. Two days later, Ohio-based Health Care REIT announced an $845 million deal to acquire McLean’s Sunrise Senior Living, which manages 300 senior living facilities in the United States, Canada and the United Kingdom, including 25 in the Washington region.
The two deals are distinct, but together suggest the health care industry is increasingly turning to consolidation as a way to cope with smaller profit margins and higher compliance costs that many anticipate when the federal government’s health care reforms under the Affordable Care Act take effect.
Aetna is the nation’s third-largest insurance provider, and its planned purchase of Coventry follows similar large acquisitions: Cigna bought HealthSpring earlier this year, and WellPoint last month announced plans to acquire Amerigroup.