Patrick Rees, Marketing Operations Superstar
The announcement that CVS has closed its $70 billion deal to purchase Aetna, America’s third-largest health insurance company, is sure to shake-up the entire industry. There have been a number of promises by CVS regarding the future of the merger, namely that they are going to cut down on paper waste by reducing the length of those ridiculously long receipts.
Wait… that might not be correct.
What they have promised is much more ambitious and, should they be successful, force those in the health insurance industry to re-think their strategies to combat a potential healthcare juggernaut. Some of CVS’s goals from the merger include:
- New points of access to the medical system
- Consumer-centred primary care to reduce costs and improve ease-of-use
- Building healthier local communities
- Improving medical care delivery
With more than 9,800 stores across the United States, CVS’s access to the public gives them a unique opportunity to really engage consumers. CVS Health President and Chief Executive Officer, Larry Merlo, is determined to ensure patients receive care in the right place and at the right time. With rural communities, in particular, lacking access to hospitals and physicians, this represents a chance for CVS to improve the healthcare options in these regions.
The Healthcare Divide
A recent study conducted to analyze the quality of healthcare in each state found that the worst states for healthcare were predominantly in the South East. A common thread amongst these states was the lack of access to healthcare as well as the high cost of it. Well, that makes sense. With little supply, those who do offer healthcare can charge higher prices. What can you do about it?
It turns out you can give people access to healthcare at their local pharmacy. CVS stores are spread across the country - from downtown hubs to small, local communities, you’ll be sure to come across a CVS store in all parts of the country. In fact, 82% of the US population lives within 10 miles of a CVS and 71% live within 5 miles.
Bridging the Divide
That’s why the merger between CVS and Aetna could give rural communities the healthcare they’ve been crying out for. The point of entry is already set up and embedded into local areas. If CVS can deliver on their promises to provide new points of access to healthcare, and improve delivery and cost, then these regions where healthcare quality lags behind could see a huge boost. It all hinges on whether CVS can execute their plan and make the most of this opportunity.
One key area will be CVS’s approach to managing chronic diseases and whether they stick with conventional medicine and treating symptoms, or if they utilize their new networks, technology, and people to actually prevent these diseases. The resources CVS has at their disposal allow them to take a much more progressive approach to healthcare and tackle the root chronic diseases instead of just the symptoms. This would help them achieve their goals of healthier communities and reducing medical costs, though we will have to wait-and-see what their approach is.
A Potential Downside?
While CVS’s ambition is refreshing, there is the risk of fully-insured employers being left behind following the merger. CVS’s acquisition of Aetna directly affects the fully-insured space and those employers who are fully-funded by Aetna policies may find themselves pushed towards CVS locations. This is great for reactive healthcare and treating the 45% of Americans who already suffer from chronic diseases. However, what about the 55% who are not sick but could soon be at risk of chronic diseases? The merger is unlikely to assist people in identifying the root cause of problems and helping them prevent potential illnesses. For employers where preventive healthcare is preferred to reactive, one such option could be programs like IncentiCare, where participants are incentivized to take control of their health in order to reduce their deductibles. Employers who have been left without any options may look to programs like this to fill the void.
The CVS-Aetna merger brings a lot of excitement and potential for major change. Should CVS and Aetna work towards their goals and bring about the change that they promise, then a vast number of people stand to gain from it. However, those who are left behind by the merger (both people and companies) will need to find a way to adapt to the change and embrace the changing healthcare horizon.