Harvard Business School Prof. Leemore Dafny writes in NEJM Catalyst about how the Aetna-CVS merger might pan out. Among her observations:
“With a focus on total costs of care in Aetna’s corporate DNA, {the merged entity} will aspire to reduce total spending for care (while increasing its own revenues) by redirecting patients to lower-cost sites for certain services, such as infusions or imaging (in which NewCo may have ownership stakes); using its physical convenience and non-visit care technologies to maintain contact with patients requiring closer monitoring, thereby potentially averting ED visits and admissions; and considering combined medical and pharmacy spending.
“Aetna can directly support these objectives by encouraging members to use Minute Clinics, other {merged entity} affiliated providers, CVS pharmacies, and Caremark services — perhaps through favorable cost sharing or more seamless scheduling, billing, and care or product delivery. To the extent that CVS’s physical and digital efforts can lower total costs of care, {the merged entity} can benefit directly from anyone insured by Aetna, and indirectly by sharing in savings with members of self-insured plans. Notably, Aetna is building market share in Medicare Advantage plans, and arguably Medicare Advantage enrollees are the members most likely to appreciate and benefit from frequent, high-touch interactions with CVS pharmacists and nurse practitioners.”
To read her essay, please hit this link.
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