Introducing Healthcare Hot Takes: How CVS Health & Aetna Will Impact Local Communities

Written January 09, 2018 by Ramesh Munnangi

Introducing Healthcare Hot Takes: This month, we talk about how the CVS and Aetna merger could impact local communities.  


Healthcare Hot Takes is Luma Health’s monthly rundown of healthcare innovations that are happening right now.  Check out what the industry is thinking, reading, & doing.  


MAIN STORY

The biggest story in the healthcare world recently is that CVS Health has agreed to buy Aetna for $69 billion.

This is a big deal--mainly because it has the potential to dramatically reduce healthcare costs by shifting care away from hospitals and health centers and into the community.  The goal of this merger is to provide a better overall healthcare journey by increasing access to things like patient care, prescription drugs, and health benefits (all equally positive things in our book).

Let’s say a consumer is currently employed under an Aetna health insurance plan. With the new merger, that same consumer would be able to get care at a CVS walk-in clinic, be prescribed medication during the visit, and then pick up the prescription at that same CVS pharmacy immediately--a literal “one-stop shop.”  A patient will be able to see providers, nurses, pharmacists, counselors, etc. at local CVS “MinuteClinics" instead of at primary care clinics or outpatient centers that may be located further away.

For scale and context, CVS Health currently operates over 10,000 pharmacy and clinic locations throughout the U.S., while Aetna is one of the largest health insurers in the country.

"This combination brings together the expertise of two great companies to remake the consumer healthcare experience. With the analytics of Aetna and CVS Health's human touch, we will create a health care platform built around individuals. We look forward to working with the talented people at Aetna to position the combined company as America's front door to quality health care, integrating more closely the work of doctors, pharmacists, other healthcare professionals and health benefits companies to create a platform that is easier to use and less expensive for consumers."

-Larry J. Merlo CVS Health President & CEO

These community-based clinics would actually have the ability to provide quality care with the extensive resources that both companies currently possess and have invested in. For example, CVS Health has established partnerships with a number of telehealth companies.  Likewise, Aetna has partnered with Teladoc to offer telehealth services in addition to their current benefits plans.

Many believe this deal is a result of Amazon’s rumored plans to enter the pharmacy space (in the same vein, Walmart is said to have been eyeing Humana, and both Anthem and Cigna have targeted Walgreens).  Therefore, CVS and Aetna have taken a defensive first step and may only be the first domino to fall in changing the US healthcare industry.  With this deal, consumers can expect to experience the direct impact of healthcare in their own communities.

The CVS-Aetna merger also symbolizes a larger trend in healthcare --the consolidation of systems in an effort to transition to a more value-based approach. 

Check out some of these other healthcare mergers that just took place:

AI IN HEALTHCARE
Artificial intelligence isn’t just today’s tech buzzword, but a vehicle that has shown a promising future in healthcare (with abilities as advanced as early detection and prevention of disease).  Here are some companies taking this to the next level.  

Prognos
Prognos is a New York City-based startup using highly developed AI to evaluate clinical lab results to predict someone’s risk for a certain illness. The company just secured $20.5M in Series C funding.

By using their algorithms and a database of over 13 billion medical records, Prognos helps clinicians make data-driven decisions about a patient’s care plan.  The goal is to use AI for early insight about a patient’s health to deliver better care and lower costs – a win-win.

Careskore
Careskore uses a combination of clinical, demographic, and behavioral patient data to power its algorithm, which can predict how likely it is that a patient will be readmitted to the hospital.  They offer personalized communication so that patients can get a clearer picture of their health and take steps to improve their wellbeing.  They also empower hospitals to reduce readmission rates and improve the quality of their care.

Founded in 2014 and based in Chicago, Careskore has raised over $4M in seed funding.


Did you enjoy our first Healthcare Hot Takes?  Hang out with us next month.  :) 

Picture of Ramesh Munnangi

Ramesh is the Director of Business Development at Luma Health. He has a B.A. in Public Policy Studies from Duke University and an M.B.A. in Healthcare Management from Tufts University. He is passionate about healthcare and loves learning about new innovations in the digital health space. In his spare time, he likes to try new restaurants, travel to exotic locations, and root for Bay Area sports teams.