Tag Archives: Aetna

CVS + Aetna. Are we sure this adds up?

puzzle-1728272_1280

CVS and Aetna. Love at second sight?

Many of the stories I’m reading about CVS’s acquisition of Aetna suggests the deal is a bold move to expand CVS’s retail clinic business.  See for example, CVS-Aetna deal has major implications for retail health, primary care practices in FierceHealthcare.

If the merger goes through, CVS plans to expand health services at its retail pharmacies, according to CVS and Aetna officials. Although it will take several years to accomplish, CVS will increase its number of clinics and add staff and equipment for a wider variety of treatments.

This seems like silly reasoning. If the idea is to get health insurers to offer plans that favor retail clinics, why not just contract with those plans? Aetna is a big company but as a national plan its market share in many geographies is relatively modest. Often –like here in Massachusetts– the local Blue Cross has the biggest market share. If CVS is big and powerful enough to actually buy Aetna, surely it can get that company and others to come to terms on retail clinics.

If there’s strategic logic behind the deal it’s more likely to be in the pharmacy management side of the business, where, for example, the combined CVS/Aetna will be the biggest player –but not a dominant one– in Medicare Part D pharmacy plans. That’s not so compelling.

Possibly, the two companies just wanted to do a big deal that wouldn’t get blocked by the Justice Department. Aetna already got slapped down for its attempt to merge with Humana, and CVS doesn’t have a lot of options for horizontal takeovers of other drug chains or pharmacy benefit managers.

There is some kinship between the companies. Both are New England based and CVS’s Chief Medical Officer, Troy Brennan previously held the same role at Aetna.

It seems just as likely that CVS will offer Aetna “products” through its stores. As @WilliamGerber points out on Twitter, CVS could sell Part D plans at retail. I’m thinking maybe CVS will eventually offer consumer friendly health plans from Aetna that go beyond pharmacy.

Certainly, the shadow of Amazon is hanging over the deal. CVS is extremely nervous about Amazon coming in and eating its lunch in a way that Walgreens never could. So it’s doing something Amazon won’t –getting more into third-party reimbursement.

Stay tuned. I look forward to seeing how this one plays out.


By healthcare business consultant David E. Williams, president of Health Business Group.

Innovation at Aetna: Podcast interview with Michael Palmer, Chief Innovation & Digital Officer

Michael Palmer, Aetna's Chief Innovation & Digital Officer

Michael Palmer, Aetna’s Chief Innovation & Digital Officer

Michael Palmer, Chief Innovation & Digital Officer at Aetna, will deliver a keynote address (Leading Innovation in a Connected World) tomorrow at the Partners Connected Health Symposium in Boston.

I caught up with him today to get his perspectives on the following topics:

  • What innovation means for Aetna and how that differs from what it means for small companies or other industries
  • The extent to which Aetna’s customers are seeking innovation vs. more prosaic factors such as reliability, consistency
  • How Aetna is partnering on innovative approaches in genomics, cancer care and other areas
  • What Aetna thinks it can bring to the consumer market to beat innovators such as Humana and Oscar Health

By healthcare business consultant David E. Williams of the Health Business Group

 

eVisits: the 30 year march?

This guy moves faster than eVisit adoption

This fella moves faster than eVisit adoption

When I first started working in healthcare I was told that innovations can take a long, long time to be adopted. Now I’m old enough to have experienced it for myself.

The big news in the Seattle Times this week?

“To cut medical costs and diagnose minor ailments, WellPoint and Aetna, among other health insurers, are letting millions of patients get seen online first.”

“In a major expansion of telemedicine, WellPoint this month started offering 4 million patients the ability to have e-visits with doctors, while Aetna says it will boost online access to 8 million people next year from 3 million now.”

This has been a long time coming, and we’re still at the early stages of adoption, with plenty of naysayers remaining. I first worked on eVisits (or webVisits) in 2001, when Healinx (now RelayHealth) commercialized them. Researchers at Stanford and UC Berkeley studied the webVisit and concluded that their use cut total medical costs while improving patient and physician satisfaction. Here’s a press release from January 2003 on the study (Final Results: webVisit(SM) Study Finds RelayHealth Reduces Cost of Care While Satisfying Doctors and Patients).

Here’s what I said about it five years ago (eVisits continue their slow, steady rise) –before the iPad, Meaningful Use, or the Affordable Care Act:

It’s interesting to be in late 2009 and see e-visits described as a “disruptive innovation” that “the medical establishment is fighting.”  It’s a sensible concept, fairly straightforward to implement, efficient, and effective for certain situations. Yet growth has been slow. Part of the issue is that it’s health care we’re talking about, where innovation tends to be retarded when it involves changing physician practices. Another, related problem is that there’s no great financial incentive for the physician or patient to make a change. Health plans that do cover e-visits often charge the same co-pay for patients as for in-person visits, even though they often reimburse physicians at a lower rate.

My guess is that over the next decade we’ll see e-visits become common. Why?

  1. Adoption will follow the typical S-shaped curve, and we’ll soon get to the steep climb almost regardless of other changes
  2. More patients and physicians will simply expect to communicate online, as they do in every other area of their personal and professional lives
  3. Payment systems will evolve to support e-visits, rather than penalize them
  4. Adoption of electronic systems in physician offices in general will enable e-visits
  5. Supporting technologies will evolve and emerge. These include remote monitoring, higher bandwidth, personal health records, and mobile applications

Enjoy the next decade and don’t expect things to change too quickly.

Halfway into the decade these five factors are still playing out. Having said that I could probably have just reposted the article and changed the date and no one would have noticed.

Will things speed up dramatically over the next five years? In 2019 will we still be reading articles about this “novel” approach? I hope not but fear that we may.

photo credit: Nasitra via photopin cc

By healthcare business consultant David E. Williams of the Health Business Group