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Maximize Value Infographics March 30, 2016

Infographic: Benefits of Scale for Health Plans

Chief Strategy Officer, BCBS of Massachusetts
Partner, Health & Life Sciences, Oliver Wyman
Engagement Manager, Oliver Wyman

The trend of mega mergers among large national health plans has raised questions around the extent to which scale benefits will play out in the market and how small regional insurers can tackle key challenges given the new landscape. Scale can in fact create a number of benefits for health insurers, including administrative cost efficiency, better contracted rates, and the ability to deliver innovative next-generation offerings that require technology, fixed cost investments, and customization. And though large, at scale plans can achieve significant savings, the degree to which scale impacts the total cost equation is limited by the fact that the influence on medical cost is generally lower. Oliver Wyman Partner Sukanya Soderland, with Principal Tomas Mikuckis and Associate Shyam Vichare, lays out these considerations below:

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