Cigna Group is on the lookout for deals that could expand its in-home care offerings and insurance services, CEO David Cordani said Tuesday at the J.P. Morgan Healthcare Conference.
He declined to comment on speculation that the company is in talks to sell its HealthSpring Medicare Advantage operations, or whether a sale would lead the insurer to once again pursue a deal with major Medicare Advantage carrier Humana. Several news outlets reported last year the company was considering a merger with Humana, but Cigna reportedly abandoned the proposition in December.
Find live JPM updates and more coverage coming out of the conference here.
Heightened regulatory scrutiny makes it harder to get big deals done than in the past, Cordani said at the gathering in San Francisco.
“It depends on the deal itself,” he said. “The marketplace has been tested outside our industry, albeit most people believe that the current environment has a higher [regulatory] threshold to get across and we recognize that.”
He reiterated Cigna’s strategy of building services for providers, rather than buying or employing them outright like competitors UnitedHealth Group’s Optum or Humana’s CenterWell. Cigna is interested in buying vendors that offer certain services, such as specialty care in the home and virtual care, or provider management services organizations, Cordani said.
“Our capital-light franchise operating model gives us plenty of flexibility to invest in the future,” he said.
Growing its suite of care management services available for patients using specialty drugs will protect the Express Scripts pharmacy benefit manager’s margins if Congress passes legislation banning spread pricing and mandating increased transparency, he said. Cigna has been “actively engaged” with elected and appointed officials in Washington, D.C., about the need to preserve customer choice, Cordani said.
He declined to provide specifics about what to expect from the forthcoming Federal Trade Commission report on PBMs. The FTC is scheduled to release the report this year.
“We’re confident that the facts will yield that the PBM industry delivers a significant amount of value,” Cordani said.
The company has not seen much demand among commercial customers to unbundle its pharmacy benefit services like Blue Shield of California did last year, he said. “Not many entities have that sophistication and the desire to take on assembling those different fragmented pieces,” Cordani said.
Cigna is also still investing in targeted health programs for certain conditions. Evernorth Health Services in the first quarter will launch EncircleRx, a health management program for individuals using glucagon-like peptide-1s to treat weight loss, diabetes and cardiovascular disease, Cordani said.
