CVS Health Effort to Acquire Aetna Shakes Up Traditional Health Silos

Gregory A. Freeman, November 29, 2017

Aetna rids itself of group life and disability before CVS Health announces plans to acquire the insurer. The merger would connect Aetna to a major pharmacy benefit manager.

CVS Health’s move to acquire Aetna positions the retail pharmacy giant as a major player in healthcare just as Aetna abandons the notion that its members benefit from the integration of health and welfare insurance products.

The planned merger is the latest in a series of moves making over the traditional lines of healthcare business.

Aetna announced recently that it will sell its group life and disability business to The Hartford Group, and the health plan is now in discussions to be acquired by CVS Health. CVS Health signaled that it aimed for becoming more than a retail pharmacy with its acquisition of Caremark in 2007, and the likely acquisition of Aetna will be another huge step in that direction, says Suzanne McGarey, senior vice president of insurance consulting firm Ascende – A Division of EPIC.

CVS Health would connect Aetna to a pharmacy benefit manager (PBM), Caremark, and the combined entity would produce a bigger warehouse of data for healthcare analytics, McGarey notes.

“By joining CVS Health, Aetna gains new advantages in the market for actual healthcare dollars, in addition to healthcare administration and insurance revenue,” she says. “In return, Aetna’s members would be positioned to have efficient pricing and access to downstream healthcare services and supplies, such as prescribed over-the-counter medications, walk-in clinics and specialty pharmacy services.”

Potentially, CVS Health and Aetna could have a closer relationship with consumers by helping them spend healthcare dollars wisely in tax-advantaged consumer health accounts, McGarey says. The combined entity would be more accessible for regular health needs and better support members in monitoring and adhering to doctor’s orders for ongoing health conditions.

“Health insurance companies are often seen as a barrier to healthcare. Maybe this business venture is an opportunity for CVS Health and Aetna to become an avenue to better healthcare,” McGarey says.

Gregory A. Freeman

Gregory A. Freeman is a contributing writer.

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