High-quality service. Improved access. Lower costs.
That’s what CVS Health hopes to achieve by acquiring the insurer Aetna, which awaits the approval of industry regulators and shareholders of both companies.
But time will tell whether this deal offers substantial savings and benefits to employers and their workers. So far, experts say, the track record of healthcare mergers or acquisitions intending to improve consumer experiences and drive efficiencies has been mixed. Although the potential exists for the combined company to hit its targets, skepticism surrounds the $69-billion acquisition about how its proposed system will redefine and reshape the delivery of healthcare in this country.
The concept behind the deal, experts say, is that by managing both the medical and pharmacy benefits of patients, the combined company can better coordinate treatment, which in turn, will lower health care and pharmacy costs for both consumers and employers.
Part of its strategy includes growing the number of CVS’ community clinics — called MinuteClinics — in its nearly 10,000 retail stores. So far, it operates 1,100 MinuteClinics inside CVS Pharmacy and Target stores in 33 states and the District of Columbia. Since their 2003 launch, the clinics have recorded 34 million visits.
“What this transaction potentially does is allow Aetna though its insurance products to utilize a combination of physicians in the community and expanded CVS MinuteClinic blueprint to bring more options for people to access primary and preventive care in the local community,” says Jim Winkler, chief innovation officer at Aon Health Business in Norwalk, Conn.
Because CVS and Aetna are also active players in the Medicare marketplace, he adds, the combined company could creative new alternatives for how companies with significant retiree populations can offer them healthcare.
However, much of the details are still unknown, experts acknowledge. Will employers have to use both Aetna and CVS to maximize this new ecosystem? Will HR will need to change its plan designs or strategies? Should co-pays stay the same when visiting either a doctor or a MinuteClinic?
“Employers would be wise to pay attention [to industry changes] in the next 12 to 18 months,” says Winkler, citing new deals between Optum and DaVita Medical or Optum’s MedExpress and Walgreens Boots Alliance that are also launching urgent-care centers in Walgreen stores.
And many HR professionals are keeping track of the possible changes, according to a new Aon survey that asked 450 HR leaders about the CVS-Aetna implications on their healthcare strategies.
Based on the survey’s results, 85 percent expect significant or moderate changes in how or where people will access healthcare. Another 60 percent are likely to make changes to their healthcare strategies, with 38 percent adopting a wait-and-see approach. Yet, based on responses from a subgroup of 210 individuals, 52 percent of respondents report having medical and pharmacy managed by separate companies and therefore anticipate no changes to their company’s approach.
Still, this new proposed system could produce many benefits such as more insight into the efficacy and value of drugs, says Brian Marcotte, president and CEO at the National Business Group on Health in Washington.
Integrating pharmacy and medical claims could improve health outcomes that incorporate value as a metric, he says. For instance, data may reveal the value of specialty pharmacy medications, specifically their impact on the total cost of care as opposed to what’s the cost of a drug related to new drugs in the same therapeutic category.
“If you’re too focused on managing drug spend alone, you may not take into consideration the impact of drugs on total cost of care,” he says. “If you’re focused on managing the medical side, you may not be looking at what the efficacy is of some of these drugs.”
The integrated system may also encourage drug compliance among patients. Marcotte says appromixately 20 percent of patients “just throw up their hands” and don’t fill prescribed drugs because they’re either in sticker shock, the drugs aren’t on the formulary or they may require prior authorization.
Regardless of what happens next, HR can’t stay in the dark, he says. HR leaders need to find out what synergies or efficiencies can be expected and by when, Marcotte says. How will this new approach complement employee’s current access to primary care? If clinics manage routine primary-care issues and chronic conditions, can primary care physicians focus more on population health management, complicated primary care cases and how to better utilize mental-health services?
While he says it’s too early to tell how this deal will play out, other healthcare companies that consolidated made similar promises which never materialized.
Although an integrated, accessible healthcare delivery system sounds like an effective approach for all parties involved, Julie Stone wonders if such systems will produce fewer, larger players in the market. As practice leader in the health and benefits practice in North America at Willis Towers Watson in Parsippany, NJ, she says that could lead to fewer competitors, making it harder for employers to negotiate and leverage pricing.
“Location will also be something to understand — what the combined presence [offers] in a given market,” she says, adding consumer experiences could vary widely based on the market in which they participate.
Looking ahead to 2018, Stone doesn’t envision the combined company offering any immediate challenges for HR professionals, including those with employer-sponsored plans. But that may change in 2019.
“There are many unanswered questions at this early stage of the game,” she says, adding that many changes will occur within the next five years. “Benefit managers and HR leaders should look at this when it seems to be more real.”