In announcing its deal to acquire Aetna, CVS Health President and CEO Larry J. Merlo promised that they will “remake the consumer health experience” by merging the analytics of Aetna with the human touch of CVS. The resulting business promises to “provide consumers with a better experience, reduced costs, and improved access to health care experts.”
If that vision sounds familiar, it’s because reduced cost and improved care are usually what’s promised whenever a new deal in healthcare is struck. So, what might this “new health care platform built around individuals” envisioned by CVS and Aetna look like to patients? What changes will actually result in better care?
The rise of retail clinics
The most obvious and immediate change will likely be more retail clinics offering more services.
CVS already dominates the retail clinic landscape, with more than 1,100 MinuteClinic retail clinics spread across 33 states. By comparison, Walgreens has little more than 400 in-store clinics in 20 states.
Staffed by nurse practitioners and medical assistants, MinuteClinics diagnose and treat minor illnesses, offer vaccinations, conduct simple health screenings, and fill out sport physicals. These services are helpful to people who are already in good health, need a specific service like a flu shot, or are traveling and can’t visit their regular doctor.
Of course, as Harvard Medical School Associate Professor Ateev Mehotra has said, “The money is in chronic illness.”
What if, in addition to sprained ankles and sinus infections, retail clinics could offer blood draws? While the current list of services is limited, it doesn’t take a lot of imagination to see the potential in adding some selective lab tests and diagnostic services.
A person with type 2 diabetes, for example, could have their quarterly A1C and cholesterol checks done at their neighborhood pharmacy/retail clinic—just drop in, no appointment necessary, for a visit that usually would have taken up a good chunk of your afternoon at the doctor’s office. The lab results from the retail clinic would be entered into the patient’s electronic health record (EHR), reviewed using automated analytics, and reported to the patient via a patient portal. Then, if the lab results fall within certain parameters, the patient’s prescriptions are automatically renewed, refilled, and ready for pick up.
Automate the health monitoring workflows for a few more chronic conditions, making them more efficient and automatic, and it’s easy to see how the cost savings and business growth really add up.
Additionally, the insurance company (i.e., Aenta) can offer incentives for using this streamlined healthcare workflow in the form of a low or no co-pay for going to a MinuteClinic. With this arrangement, the patient, payer, and insurer all experience a tangible cost saving by choosing MinuteClinics over a primary care physician, local hospital, or competing retail clinic.
A familiar “new” vertical model of healthcare
The vertical model of healthcare delivery, suggested by the CVS-Aetna merger, has a single company providing insurance, medical treatment, and pharmacy services. While analysts are touting this as something new, it looks a awful lot like Kaiser Permanente.
Kaiser Permanente sells health insurance and provides full-service medical care in eight states plus the District of Columbia. Its members receive care at Kaiser hospitals and clinics from medical professionals who are salaried employees. Prescriptions are filled by Kaiser pharmacies and mail order services. Medical tests are processed in its labs. And after investing billions of dollars and years of work, Kaiser has implemented one of the most comprehensive EHR and patient portal systems in the US. Beyond all this, Kaiser’s patient-facing HIT systems provide access to personal medical records, email to care providers, facilitate appointment scheduling, refills prescriptions, acts as a trusted online medical reference, and can do much more for its 11.7 million patients.
Kaiser’s is a model that has worked for 70 years and is “traditionally one of the lowest-cost, highest-quality health care options in California.”
There are, however, a several key differences between Kaiser and CVS-Aetna:
- Kaiser is a non-profit foundation, not a for-profit corporation. While Kaiser’s regional operations must be financially self-sustaining, they are not expected to make a shareholder-pleasing profit.
- As a full-service healthcare provider, Kaiser treats every kind of illness and health condition, not just non-emergency, ambulatory illness. So it’s operations and infrastructure must accommodate all the health needs of its patients, not just the narrow range of health needs addressed by MinuteClinic.
- Also, Kaiser’s organization doesn’t include a retail store. Some analysts have raised privacy concerns since there are no clear privacy regulations established for the kind of business the CVS-Aetna merger would create. Most people wouldn’t care if their health insurance company knew what kind of shampoo they use, but could the same be said about the liquor they drink or OTC birth control they use? Both are items are sold at CVS pharmacies.
Analytics and the human touch?
The expected financial benefits of applying analytics are clearly laid out in the merger announcement: CVS-Aetna have identified a potential “significant synergy” of $750 million in the second full year after the merger.
These synergies will come, largely, from HIT systems that track, analyze, and report data on the treatments delivered, health outcomes that result, and associated costs. The company mentions reducing wasteful spending, improving patient adherence, reducing hospital readmissions, and using a MinuteClinic instead of an emergency room as potential sources of the projected synergies.
As for the human touch part of the merger equation, CVS-Aetna is not so clear.
CVS Health touts its many convenient locations, and astonishingly, more than 50% of people in the US live within 10 miles of a MinuteClinic. Will geography and convenience be enough for patients to go to a retail clinic instead of their established medical provider?
New kinds of patient interactions are also mentioned. Pharmacists might review patient prescription records and, presumably, suggest cost-saving changes. Care teams, made up of health coaches and pharmacists, could provide post-discharge guidance and education. Through new and more cohesive patient services, CVS-Aetna expects to improve patient adherence and avoid hospital readmissions.
Not everyone is convinced
CVS-Aetna argue that patients will benefit from their merger. They promise a better consumer experience, lower costs, and easier access to care.
But, not everyone is on board.
A better consumer experience is predicated on robust HIT systems that provide comprehensive, real-time access to patient medical records, clinical results, pharmacy orders, and insurance coverage and billing information. It could take up to two years after the merger is complete for CVS and Aetna’s HIT systems to be fully integrated. This estimate assumes that the integration goes smoothly (and might be optimistic).
Pointing to CVS’s acquisition of the pharmacy benefit manager (PBM) Caremark, consumer-focused analysts question whether lower costs will be a natural outcome of this merger. Once CVS acquired Caremark, it excluded competing pharmacies from its program, reducing patient choice and driving drug prices up.
Even if MinuteClinic adds general practitioners or family medicine doctors to its staff and expands the services it offers, the care available at its retail clinics will still have significant limitations. Chief among them are the fact that anyone needing specialist care will need to go elsewhere. For example, a woman needing maternity care will likely still need to go to a traditional medical provider, clinic, or hospital for those services.
It remains to be seen if patients will switch from their primary care physician or specialist for ongoing medical care to a retail clinic. While the retail clinic might be convenient, it doesn’t look like it will offer continuity in care. The relationship and rapport between patient and provider has, for decades, been a tenant of modern medicine. Will patients be willing to forego those elements and see a different medical practitioner at each visit?
In the hands of regulators and shareholders
The merger between CVS Health and Aetna is now in the hands of regulators and shareholders who will decide whether it will go through or not. With 9700 drugstores located across the country, CVS has plenty of opportunity to impact the patient care landscape. But ultimately it will be the patients, with their care choices, and the payers, with their purchase choices, who will determine if this new model of retail clinics succeeds.
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