For now, the most important issue that the proposed CVS Health Corp.-Aetna Inc. deal brings up is, will the merger deliver what the two companies’ CEOs are promising – better health at a lower cost?
It is a big promise, and one that requires a lot of work.
The physical ingredients are in place, given CVS’ nearly 9,700 retail locations (including an existing 1,100 MinuteClinics).
The challenge is going to be making offerings that entice consumers to use the new CVS-Aetna because their products and services have value and help them become or stay healthy. And while all we have now are the promises of the leaders of the two companies, there is some history at least with CVS that sheds light on the likely outcomes of the merger.
First, patient visits to MinuteClinics for simple evaluation and treatment are less expensive than hospital emergency rooms, so the extent to which the former can substitute for the latter, the global cost of health care delivery will decline.
Second, the market power that Aetna and CVS Caremark (the company’s pharmacy-benefit-management business) will have should allow for more consumer-friendly negotiations with drugmakers, although it’s unclear if either company so far has had much luck on taming big pharma’s recent price increases.
Lastly, CVS has shown a corporate commitment to health, starting with its ban on tobacco-product sales but also including its internal policies supporting healthy choices by its employees. If the company brings this kind of vision to the merged company, success for consumers seems more likely.