Analysis: CVS-Aetna Could Lead to Lower Heathcare Costs
The merging of CVS Health and insurance giant Aetna is the first, we believe, of many similar deals that ultimately point toward transformative changes in healthcare and optimally, lower costs.
Vertical integration for CVS/Aetna is a strategic move to get ahead with healthcare synchronization, the term used to describe the leveraging of all patient information — medical and pharmacy claims, wearable tech data, demographics, socioeconomic status, education, etc. — to determine the best care path for patients.
CVS/Aetna is in a good position to step into synchronization, given Aetna’s network and experience managing members and CVS’s nationwide brick and mortar presence with both pharmaceutical dispensing and minute clinics, its ability to carve drugs out of high-cost places of service like outpatient/physician office, and its home infusion business.
More Personalized Care
With better medical and pharmacy data, and more information on other variables impacting health status, CVS/Aetna may be able to provide more personalized care — that is, develop more personalized relationships with members — which can help with innovation in care delivery and may help reduce unnecessary care and its attendant costs.
To further reduce pharmacy costs – which typically range from 15 percent to up to 20% of a health plan’s cost structure – CVS/Aetna will likely be looking to drive down costs by developing efficiencies and improving medication adherence, among other strategies.
We expect to see similar deals to this merger, as some insurers will react by looking for opportunities to counter any perceived market changes. Just as the market reacted to the news of possible mega-mergers a year ago, some health plans will react to this merger as a defensive move.
If nothing else, this merger provides further impetus for the big health insurers to look at pharmacy, if they’re not already doing so. Integrating medical and pharmacy can help optimize medication prescription and distribution and better manage processes that were historically rendered by Pharmacy Benefit Managers (PBMs).
Health plans may also be able to provide more member touchpoints and opportunities for patient care. Aligning these areas within one organization can also result in enhanced data and brand recognition for the insurer, improved access for the patient, and a more personalized experience for the consumer.
Efforts to coordinate care and make it more easily accessible and convenient are increasing across various parties in the care continuum. Whether incenting physicians or broader hospital systems, there are a greater number of agreements that emphasize improved overall outcomes and quality for patients when determining reimbursement amounts from insurers to providers.
Beyond contracting relationships, partnerships have been formed via Accountable Care Organizations (ACOs). The CVS/Aetna deal is another example of these organizations working to find ways to better integrate care. The expectation that, when optimized, this integration will lead to better health outcomes, healthier individuals, and therefore lower overall healthcare costs.
Vertical integration for CVS/Aetna is a strategic move to get ahead with healthcare synchronization, the term used to describe the leveraging of all patient information — medical and pharmacy claims, wearable tech data, demographics, socioeconomic status, education, etc. — to determine the best care path for patients.
CVS/Aetna is in a good position to step into synchronization, given Aetna’s network and experience managing members and CVS’s nationwide brick and mortar presence with both pharmaceutical dispensing and minute clinics, its ability to carve drugs out of high-cost places of service like outpatient/physician office, and its home infusion business.
More Personalized Care
With better medical and pharmacy data, and more information on other variables impacting health status, CVS/Aetna may be able to provide more personalized care — that is, develop more personalized relationships with members — which can help with innovation in care delivery and may help reduce unnecessary care and its attendant costs.
To further reduce pharmacy costs – which typically range from 15 percent to up to 20% of a health plan’s cost structure – CVS/Aetna will likely be looking to drive down costs by developing efficiencies and improving medication adherence, among other strategies.
We expect to see similar deals to this merger, as some insurers will react by looking for opportunities to counter any perceived market changes. Just as the market reacted to the news of possible mega-mergers a year ago, some health plans will react to this merger as a defensive move.
If nothing else, this merger provides further impetus for the big health insurers to look at pharmacy, if they’re not already doing so. Integrating medical and pharmacy can help optimize medication prescription and distribution and better manage processes that were historically rendered by Pharmacy Benefit Managers (PBMs).
Health plans may also be able to provide more member touchpoints and opportunities for patient care. Aligning these areas within one organization can also result in enhanced data and brand recognition for the insurer, improved access for the patient, and a more personalized experience for the consumer.
Efforts to coordinate care and make it more easily accessible and convenient are increasing across various parties in the care continuum. Whether incenting physicians or broader hospital systems, there are a greater number of agreements that emphasize improved overall outcomes and quality for patients when determining reimbursement amounts from insurers to providers.
Beyond contracting relationships, partnerships have been formed via Accountable Care Organizations (ACOs). The CVS/Aetna deal is another example of these organizations working to find ways to better integrate care. The expectation that, when optimized, this integration will lead to better health outcomes, healthier individuals, and therefore lower overall healthcare costs.