What Would the CVS/Aetna Merger Mean for Healthcare?
Despite the uncertainty surrounding the industry, healthcare mergers and acquisitions, like the proposed CVS Health/Aetna deal, continue to occur. Healthcare is leading other industries in high-grade M&A activity and, according to a PwC report, the health care industry has initiated more than 200 deals per quarter for 12 straight quarters since 2015.
If the CVS and Aetna deal is approved, the acquisition will be the largest healthcare insurance deal on record based on Aetna’s market capitalization. How could this impact the healthcare industry as a whole? Bruce Carver, associate vice president of payer services, recently connected with Managed Healthcare Executive to share his thoughts. Here are three key implications outlined from the discussion:
- Impact on Industry Competition – If the merger is approved, healthcare executives will likely need to rethink traditional industry competitors as this would establish market competition against national payer UnitedHealth Group and its ownership of OptumRx.
- Greater Transparency From Pharmacy Benefit Managers (PBMs) – PBMs have historically been viewed as the drug purchasing middlemen to negotiate lower prices. However, questions have arisen as to whether the savings have actually been passed on to employers and/or consumers. As a result, the market is demanding more pricing transparency. New integrated models, similar to the one created by the CVS and Aetna merger, will help facilitate that transparency.
- Give Employers and Consumers More Control – By allowing employers and consumers to own more of their healthcare and pharmacy benefits, the industry could save millions. For example, by creating pharmacy benefits that incentivize people with chronic conditions (e.g. diabetes, high blood pressure) to fill and adhere to their medications, the industry could prevent avoidable hospital admissions that cost over $100 billion a year. An integrated insurer, like CVS and Aetna, could establish such incentives.
To read more insights from Bruce, and other industry experts, check out the full Managed Healthcare Executive articles here and here. If you’re looking for a partner to help your organization manage the shifting healthcare landscape, contact us here.