WOONSOCKET — CVS Health Corp.’s $77 billion merger with Aetna Inc. would combine analytics and community-centered care in the patient-centered health model in 10,000 retail locations throughout the U.S. that officers of the new company said will lower healthcare costs and improve chronic disease management.
CVS Health President and CEO Larry J. Merlo and Mark T. Bertolini, Aetna chairman and CEO discussed the details of how they intend the two companies to work together on the pre-tax $69 billion transaction during an investor call Monday morning.
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“This combination brings together the expertise of two great companies to remake the consumer health care 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 health care professionals and health benefits companies to create a platform that is easier to use and less expensive for consumers.”
Merlo noted that half of Americans deal with some form of chronic disease, such as diabetes, for which they leave the doctor’s office with a plan of care. People are often not reliably following those care plans in between doctor’s visits, however, Merlo said.
A merged CVS and Aetna is uniquely positioned to use data and routine interaction with patients to better manage their care, Merlo said.
“We’re in the community,” Merlo said.
The merger is a natural evolution for both companies as they seek to put the consumer at the center of health care delivery. CVS Health has steadily become an integrated health care company, and Aetna has moved beyond being a traditional insurer to focus more on consumer well-being.
“This is the next step in our journey, positioning the combined company to dramatically further empower consumers. Together with CVS Health, we will better understand our members’ health goals, guide them through the health care system and help them achieve their best health,” said Mark T. Bertolini, Aetna chairman and CEO.
The strategy also takes advantage of the increasing number of people in the U.S. taking more responsibility for paying for their health care as the burden of cost is being shifted to them, according to a statement from CVS Health.
The merger connects Aetna’s network of providers with greater consumer access through CVS Health’s more than 9,700 CVS Pharmacy locations and 1,100 MinuteClinic walk-in clinics as well as extensions into the community through Omnicare’s senior pharmacy solutions, Coram’s infusion services, and the more than 4,000 CVS Health nursing professionals providing in-clinic and home-based care across the nation.
Bertolini said the new company will create 10,000 care centers that eliminate confusion about Medicare services, and offer care at a lower cost, with more convenience.
Long-term, major growth opportunity for the new company lies in the government, Merlo said, creating, “The opportunity to help them navigate that system, put them on a plan, and make this a place, these new front-doors of healthcare, 10,000 of them, a place where people want to go, because they get better help, they get a lower cost product, and they get navigated through the system over time. So we can eliminate prior authorizations, we can set up appointments,” Bertolini said.
CVS Pharmacy locations will include space for wellness, clinical and pharmacy services, vision, hearing, nutrition, beauty and medical equipment, in addition to the products and services our customers currently enjoy, said Mike DeAngelis, Senior Director of Corporate Communications for CVS Health.
A new health services offering available in many CVS locations will function as a community-based health hub dedicated to connecting the pathways needed to improve health and answering patients’ questions about their health conditions, as well as prescription drugs and health coverage, available to all patients and payers. DeAngelis said.
“We want to make accessing health care services as easy as possible for people, whether that means bringing medicine and services to their homes or serving them face to face in our stores. For those who do not visit our stores as regularly, we will connect with them digitally or via phone. We are creating health care services that consumers can access in a way that meets their needs,” DeAngelis said.
“I think the real opportunity lies in the government businesses,” Merlo said, “…the ongoing growth in Medicare and what we can do there, along with Medicaid.”
The partnership also combines the capital assets of CVS and Aetna, $2 billion and $3 million, respectively. The new company is expected to realize $750 million in savings through streamlining redundant functions and reduced medical costs. The merger was financed through cash on-hand combined with $45 billion in debt.
Rob Borkowski is a PBN staff writer. Email him at Borkowski@PBN.com.
