Vertical integration is happening everywhere, especially due to advances in technology allowing for much greater economies of scale. Insurers have to combine with each other to get bigger to negotiate with providers and pharmacies, providers have to combine with each other to get bigger to negotiate with insurers, pharmacies have to combine with each other to negotiate with drug manufacturers and PBMs, drug manufacturers combine with each other to negotiate with insurance, and finally, insurance combines with pharmacy and PBM (Aetna/cvs) to negotiate with drug manufacturer and providers.
Telecoms, computers, retailing, everything is trending towards a handful of big players with enough vertical integration to be able to survive. Initially, this is could be good for consumers as the cost savings of economies of scale might be passed on to them, but we will pay for it at the end when there is only 2 vendors to choose from and they dictate the price.
That's why we should discourage company growth beyond a certain size. They grow because they are better than the competition but at some point they can just overpower any competition or just buy them out.
When the companies are the same type of business, it is called horizontal consolidation, not vertical integration. Vertical integration is a company buying its supplier or its customer.
Yes, I started off my comment referring to Anthem purchasing Aspire Health the previous commenter referred to which is vertical, but then I abruptly transitioned to talking about horizontal integration. I was trying to convey that because of the horizontal integration, the next step is to go vertical like insurance is doing with providers and PBMs and pharmacies.
Telecoms, computers, retailing, everything is trending towards a handful of big players with enough vertical integration to be able to survive. Initially, this is could be good for consumers as the cost savings of economies of scale might be passed on to them, but we will pay for it at the end when there is only 2 vendors to choose from and they dictate the price.