Sizing Up the Mega-Mergers Through Prisms and Microscopes.

Prisms are one of the oldest tools ophthal­ mologists use to examine misaligned eyes. The prism bends light rays but does not focus them and lets the doctor measure, in mil­ limeters, the deviation between two eyes. In trying to get a read on how regulators will examine the alignment of the Anthem–Cigna and Aetna–Humana mega­mergers, antitrust attorney Matthew Cantor found his prism in, of all things, the food service industry. In July 2015, the Federal Trade Commission (FTC), blocked the $8.2 billion merger of Sysco and US Foods—the two biggest food service companies in the country. The commission successfully argued in court that the merger would reduce competition both nationally and in many local markets. Instead of appealing the ruling, both parties walked away from the deal. “That to me could be the prism through which these insurance mergers are being viewed,” Cantor says. But while observers and watchers like Cantor use prisms, the federal and state regulators as­ sessing the effect these deals will have on insur­ ance markets will be using microscopes, par­ ticularly one called the Herfindahl–Hirschman Index (HHI). That large deals like this will get close scrutiny that takes the better part of the year is a given; trying to predict the results is good sport for legions of antitrust and health care observers.