Centene/Magellan Merger Review in California
For the California Department of Managed Health Care’s (DMHC’s) review of the acquisition of Magellan Health, Inc. by Centene Corporation, academic affiliate Deborah Haas-Wilson prepared an independent evaluation of the merger’s potential impact on subscribers and enrollees and on the stability of the health care delivery system in California. Centene and Magellan both provide a range of health care services, including financing for specialty services, pharmacy benefits manager (PBM) and specialty pharmacy services, and employee assistance programs (EAPs). In some segments, Centene and Magellan are competitors, while in others, Magellan is one of Centene’s suppliers.
The planned merger, which had been approved by the US Department of Justice, required the DHMC’s approval under California’s Health & Safety Code, as it involved two Magellan service plans licensed to arrange for behavioral health care services throughout California. To prepare her report, Professor Haas-Wilson worked with an Analysis Group team led by Managing Principal Brian S. Gorin and Vice Presidents David Toniatti and Jonathan Borck.
Professor Haas-Wilson assessed whether the merger would raise concerns for horizontal or vertical competition in various health care-related markets in California. She concluded that there were potential vertical concerns in some areas and recommended several measures to mitigate those concerns.
The DMHC approved the merger with conditions based in part on those recommended by Professor Haas-Wilson.