CVS Health Effort to Acquire Aetna Shakes Up Traditional Health Silos

Gregory A. Freeman, November 29, 2017

The proposed CVS Health/Aetna partnership, and others like The Cleveland Clinic’s alliance with insurance company Oscar Health, are blurring the lines within the traditional healthcare industry, says Bruce Carver, associate vice president of payer services at MedeAnalytics, which provides data analytics to the industry.

“As the industry looks to reduce inefficiencies and improve care coordination, providers and payers need to work hand in hand. These partnerships enable that collaboration while eliminating some of the contract barriers around value-based care,” he says. “If the merger between CVS Health and Aetna is approved, healthcare executives will likely need to rethink traditional industry competitors as this would establish market competition against national payer UnitedHealth Group and its ownership of OptumRx.”

PBMs have historically been viewed as the drug purchasing middlemen to negotiate lower prices, Carver notes, but questions have arisen as to whether actual savings have been passed on to employers and consumers. As a result, the market is demanding more price transparency. Carver says new integrated models similar to the one created by the CVS and Aetna merger may help facilitate that transparency.

“This is only the beginning of major mergers as the industry looks to mirror the markets that operate outside of traditional health care and address consumer needs, like Amazon.com,” Carver says. “The way in which consumers access goods and services has radically changed over the past few years. These mergers are a way for the healthcare industry to address this.”

Clinicians and consumers may not benefit from the mergers, and care could suffer, says, Alejandro Badia, MD, a hand and upper extremity surgeon in Miami, FL, and CEO of OrthoNOW, an orthopedic urgent care franchise.

"As a clinician, I have great concerns about major mergers between the current entities that control healthcare. Frankly, this would be a very good idea if there was collaboration with the people that actually provide the health care and have the correct expertise to do so,” he says.

Healthcare is perhaps the only industry where the players involved do not have their incentives aligned, Badia says.

“If the goal is to improve quality, that will lead to decrease cost and help ensure our country remains on the top of the healthcare latter in terms of quality,” Badia says. “However, accessibility has been an issue and I believe a dialogue with clinicians during these proposed mergers is critical to have an ideal outcome."

Gregory A. Freeman

Gregory A. Freeman is a contributing writer.

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