VOL. 132 | NO. 240 | Tuesday, December 5, 2017
Memphis Professionals React to CVS-Aetna Deal
By Andy Meek
News coverage in the immediate aftermath of the announcement that drugstore giant CVS Health plans to buy health insurer Aetna for $69 billion focused on how it will change the country’s health care industry in a significant way. But much is still unclear.
While it’s true the combined enterprise may be in a better position to offer a one-stop-shop when employers are lining up health insurance for employees, there’s also a wait-and-see attitude many professionals are taking.
Tim Finnell, founder of Group Benefits LLC in Memphis, points out that CVS – which has 10,000 pharmacy and clinic locations that could become expanded channels of health care delivery – “is already one of the largest Pharmacy Benefits Managers (PBMs), providing the drug card-processes used by many insurance companies and self-funded plans.”
There could, he notes, be some efficiencies and coordination of care as a result of the deal. Emphasis on “could.”
Jenny Kiesewetter, principal of the Kiesewetter Law Firm PLLC, said the merger reflects a trend toward comprehensive health care delivery systems that are emerging in today’s marketplace. As a result, “we’re going to see less division of care among doctors, pharmacies and hospitals. CVS and Aetna have achieved a comprehensive provision of services by positioning themselves as players in the new market with CVS’ pharmacies and community-based clinics, along with Aetna’s care directly provided to patients.”
Time will tell if the companies can achieve significant cost savings under their model, she adds, as savings were hinted at in the Sunday night announcement Dec. 3 about the acquisition. Among other things, the announcement made note of “the ability to delivery $750 million in near-term synergies.“
Amy Campbell is associate professor of law and director of the Institute for Health Law & Policy at the University of Memphis. She agrees that, at least in theory, efficiencies and bargaining power resulting from the deal “could help consumers, although I would think the jury is still out on the effects on consumers.
“Greater access to and sharing of data could also help consumers, but again, it will be interesting to see how it plays out, and if this leads other insurers to look for similar opportunities,” Campbell said.
CVS is the No. 2 provider in the U.S. of prescription drug benefits, while Aetna is the No. 3 health insurer in the nation.
U.S. Rep. Steve Cohen, D-Memphis, thinks the landscape is not as consumer-friendly as it needs to be, and that this merger potentially takes things in an anti-consumer direction.
There’s already too much consolidation in the drugstore business, Cohen said, and “I have not seen much in the way of community service from them.”