Moody's: Insurers face provider consolidation risk

Zaharuk also writes about the credit implications of insurers’ own deals. Moody’s generally likes small, focused deals that insurers make to acquire specific capabilities, Zaharuk says.

Moody’s is more skeptical of insurers’ efforts to acquire physician practices. ”The primary risk is the need to separate the insurance operation from the medical practice to avoid any perceived conflict of interest and medical malpractice liability,” Zaharuk writes.

In some cases, he says, insurers have made physician practice deals that reduce those concerns by clearly distinguishing between the insurers’ insurance operations and clinical operations. Moody’s views on health care trends can have a concrete effect on insurers’ operations, because lenders use ratings from Moody’s and other firms when deciding whether to issue credit to companies and how much to charge for credit.