As conjectures fly regarding the potential disruption the proposed acquisition of Aetna by CVS will have on the healthcare industry, IDC Health Insights will confine its comments to the technology implications, in particular access to and sharing of data within the existing healthcare ecosystem. This blog will also consider the implications of the acquisition creating a local care delivery presence for Aetna with the intent to increase consumer value.
Will the proposed acquisition of Aetna by CVS create a profound disruption to the healthcare industry seems to be the question of the day. The conjectures are far a field and as varied as the number of authors. The healthcare industry has witnessed consolidation for at least a decade and while the Aetna proposed acquisition is the largest it will likely follow similar patterns of those that went before. First and fore-most change will not occur quickly as regulatory and corporate hurdles exist and as with most acquisitions and mergers the devil is in the detail and those take time to sort out. The opportunity that IDC Health Insights will explore here is two-fold, the implications of a large national carrier having a local presence in which to deliver services that include and go beyond typically insured services and the implications of the power of the data held by CVS and Aetna has on improving clinical and financial outcomes.
The health insurance industry has struggled for decades with how to best engage its members to improve their health and to form collaborative relationships with local physicians. This lack of local presence has been a gating factor in the effectiveness large national carriers. In markets where Aetna for example, has a strong presence due to the volume of their employer clients, they have, as have other national carriers, established stronger relationships with providers and greater recognition by consumers. Not so in markets with less of an Aetna presence. With the breadth of the CVS network, Aetna may well be able to increase its presence in less penetrated markets. One might imagine that any consumer might receive healthcare services, like nutrition counseling or related personalized counseling at a local CVS. Additionally, CVS may well benefit from increased traffic that would result in consumers seeking services and see an increase in retail sales. A personal relationship might be developed between the local CVS counselor. Personal relationships are known to improve compliance to care plans and such a relationship might influence a future decision regarding insurance coverage (assuming an employer offers such coverage). Aetna might also see an increase in member satisfaction if a member can receive high value services locally.
CVS already offers "counseling" at its pharmacies to increase satisfaction though it is limited to medications. While one can paint a positive picture of a local CVS as a center of health and health related services and products, the challenges are significant. The typical CVS foot print can barely squeeze in a closet office for its Minute Clinic and like other retail-based urgent care centers, flu shots are given out in the open (maybe a screen to shield the patient). It is unlikely that CVS will give up its lucrative retail shelf space for healthcare services that will have nowhere near the margins of retail. CVS will have to significantly re-configure its current stores. Additionally, most urban and suburban neighborhoods already have several urgent care centers many of which are part of local hospitals and are staffed by physicians offering a full range of diagnostic equipment. Full service audiology and optometry providers are emerging in every local mall and are staffed with physicians, many with privileges at local hospitals and fully trained and licensed technicians. CVS/Aetna would face significant competition should they choose to expand CVS' current footprint in health services. One need only peek into social media to get a sense of an underlying level of consumer frustration and lack of trust with both Aetna and CVS, an additional hurdle that will need to be overcome. The notion of moving chronic care management away from direct provider management will also present challenges. For years payers have attempted to assist its members to manage their chronic conditions with limited success. Time and time again, consumers have reported that they are more likely to comply with a directive from a physician than from a payer or other third party.
The more positive impact on the healthcare industry may in fact lie in the data held by CVS and Aetna and their ability to integrate and apply the data to improve clinical and financial outcomes or in the case of CVS improve marketing. As the tsunami of the ever increasing volume and velocity of data continues in healthcare the industry is challenged with how to best harvest and leverage the data. The combination of prescription drug information, medical and surgical claims payment, retail data and socioeconomic data (which CVS undoubtedly collects before it opens a store) creates a powerful data set that could be used to not only understand underlying illness but to guide consumers to improve their compliance to and extend their decision making. Imagine the value in reminding a consumer who is buying an over the counter or prescription flu medication that it is not too late to get a flu shot once they have recovered from their current illness. Reminders to purchase a blood pressure cuff for those recently diagnosed with or beginning hypertension medications is another example of how data integration can add value. The issue of data integration and collaboration becomes even more significant should CVS expand its health service delivery. There is a delicate balance that must be maintained to not disrupt the physician/patient relationship that Aetna and CVS must manage. The fragmentation of care delivery currently experienced in the healthcare ecosystem would be vastly improved if data and insights were shared which would mitigate the impact of yet another site of care delivery not connected to a patient's existing network of care. Physician push back on an Aetna/CVS care delivery strategy might also be partially mitigated if Aetna/CVS insure that patients get referred back to their primary care physicians and are notified of "urgent care" or care management services delivered to their patients.
While speculation of the impact of the CVS proposed acquisition of Aetna will only grow in coming weeks and months, it is key to watch that new initiatives by CVS and Aetna positively address the quadruple aim of improving the health of the population, improving the patient and physician experience all while managing costs,