CVS-Aetna merger could shift patient flow and business models

December 5, 2017 David Bennett

CVS Health’s pending acquisition of health insurer Aetna is part of a strategy to develop a fully integrated healthcare network similar to that of Kaiser Permanente, analysts say.

The acquisition, if approved by regulators, could make the nation’s healthcare industry less costly for patients while also changing the business models of physician practices and hospitals, says John Osberg, a mergers and acquisitions specialist at the consulting firm Informed Partners.

Pharmacy chain CVS has more than 9,700 drugstores and 1,100 MinuteClinic outlets—many collocated in its drugstores—offering convenient access to medical treatment, with all the data stored on Epic EHR systems. CVS also operates Caremark, a major pharmacy benefit management company, which offers real-time claims adjudication. What CVS lacks is access to patients who are receiving treatment outside of the pharmacy. That’s the strength of Aetna, which covers more than 23 million members for medical care and another 14.5 million for dental services.

An Aetna-CVS partnership could achieve care savings by incentivizing patients to get care at one of CVS’ MinuteClinic outlets rather than going to a physician office, emergency department or a hospital. Osberg believes Aetna will offer incentives, such as waived or reduced co-pays, for members who go to MinuteClinics for appropriate treatment.

These incentives to steer patients to MinuteClinics will reduce traditional physicians’ volume of routine medical visits, but Aetna can pay incentives to physicians and hospitals to steer their routine patients to MinuteClinics, and that would enable clinicians to focus on sicker patients who need more attention.

Further, providers could benefit from wider use of pharmacy benefit management technology to settle payments more quickly. “Aetna will use real-time technology for real-time adjudication of routine visits, and providers will get paid faster and more accurately,” Osberg adds.

If the vision is fully achieved, it could benefit electronic health record vendor Epic, which provides the EHR for CVS’ network of clinics and is working with the drug store chain on an approach for prescribing less expensive drugs. Analysts say the Aetna-CVS merger could possibly give Epic a huge advantage over other EHR companies.

But in order to make the merger work, the companies will need to successfully integrate their systems. Major challenges face the two companies as they seek to combine, particularly on the integration side, both technically and culturally, says Dave Bennett, a systems integration specialist and executive vice president at Orion Health, vendor of the Rhapsody integration engine that connects disparate IT systems within complex environments.

"The businesses are so different that the semantics to align the companies will be difficult," he notes. "CVS, a retailer and supplier-distributor, looks at how to optimize the retail channel--it's all about optimizing the supply chain. On the other hand, healthcare emphasizes billing and reimbursement issues. CVS has pharmacy and consumer buying habits information. Aetna has information on consumers, wellness and preventive care. The companies have to take data from two different worlds, understand it and optimize it."

The new company, Bennett believes, will need a new model of engagement with the consumer and that will include the need for community IT integration with Blues plans, other payers and providers.

Information systems integration efforts will cover pharmacy, claims processing, plan management, employers, patients and clinical systems, among others. The companies will have to select, organize, verify and pull out data, then place it in a real-time analytics platform and doing so at considerable scale as they seek the best ways to combine and move forward.

The original article can be found at the Health Data Management site here.

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