The Growth Channel

Vertical integration: Welcome to health care's 'turducken' era

by Anna Yakovenko and Jodi Askew

Turducken (noun): an increasingly popular Thanksgiving main course consisting of a chicken stuffed within a duck stuffed within a turkey.

The turducken has risen to pop culture fame due to its unusual combination of meats stuffed into one entree. In a lot of ways, recent health care integrations—such as CVS' announced acquisition of Aetna, Optum's acquisition of DaVita Medical Group, or Humana and Walgreens' new senior-focused clinics—resemble the turducken concept: They're a surprising combination of companies which operate in different sectors, serve different customers, and prioritize different goals.

View the slide deck: Learn how vertical integration could impact your organization

Like the turducken, these integrations have captured the public's attention—leaving many wondering why these companies are joining forces, and what it means for them.   

Why combine, and why now?

Unlike the turducken, the rationale and potential benefits afforded by these mergers are often well-founded. It's a strategy to combat uncertainty, using scale and diversified revenue streams to maintain competitiveness amid market changes. We've seen similar moves in telecom, auto, and other industries.

Your turducken-era guidebook

Many provider strategists are struggling to put these new integrations into context and plan for impact. To help you prepare, we analyzed three new-in-kind combinations that are either rumored, proposed, or approved in our new study, Vertical integration: Preparing for new competition:

For each combination, we explain the:

  • Potential opportunities available to stakeholders;

  • Most likely impacts in affected markets;

  • Types of providers most vulnerable (and those who could benefit); and

  • Possible actions to defend against or capitalize on the opportunity.


The Vertical Integration Exposure Calculator


This exclusive tool will help you anticipate the likelihood of integration impacts in markets by generating county-specific scores based on the combined presence of two integrators in a county relative to other regions.

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There's more than just M&A. Get the cheat sheet for hospital partnership and affiliation models.

The field guide to hospital partnership and affiliation models

Behind the flurry of M&A in recent years, a deeper trend of hospital integration is underway: the emergence of alternative partnerships that secure many of the same benefits of M&A without the financial and legal commitment: Clinical affiliation, regional collaborative, accountable care organization, and clinically integrated network.

This guide defines these types of partnerships and offers benefits, drawbacks, and examples of organizations in each.

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