Chapter 16Intangible Assets in Healthcare
We have already covered the supporting material regarding intangible assets in ad‐tech.
Now let us review the types of intangible assets that exist within health insurance industry companies. I conducted a study to understand the intangible assets that matter the most in the health insurance industry. The reason I chose to analyze the health insurance industry is that health insurance is complex; it is highly intangible driven, the companies are very cash rich, and it is a lucrative industry. Also, health insurance is somewhat unfamiliar to businesspeople outside the vertical. I reviewed all of the M&A acquisitions from 2010 to 2017 for the following buyers: Aetna, Anthem, Centene, Cigna, Humana, Magellan, Molina, UnitedHealthcare, and WellCare.
After researching these acquisitions and analyzing the purchase price allocations as reported in publicly available Securities and Exchange Commission (SEC) filings, I was able to calculate that 90 percent of the M&A value for all of the acquisitions by these buyers was assigned to intangible assets. Out of this 90 percent, customer‐related intangible assets accounted for 65 percent.
The research pertains to specific intangible assets that are related to financial performance. What is important to understand about health insurance is that not all customer relationships in health insurance are the same. In the relationship between a health insurance company and a customer, what makes it lucrative ...