top of page

CVS buys Aetna: what does it mean for your patients?

Updated: May 16, 2019

With healthcare cost rising 6-7% a year (since 2014) more and more Americans are facing difficulties paying, yet despite high costs, access to doctors in some areas is limited. Could the recently announced deal for CVS to buy Aetna start solving a few of the industry’s biggest pain points?

Pain Point 1 – It’s a long way to the doctor’s office. The wave of healthcare consolidation over the last thirty years has left millions of Americans inconveniently far from their nearest health clinic.  This merger has the potential to change all that.  CVS currently has over 1,100 “Minute Clinics,” walk-in facilities spread across 33 states that offer affordable health care services seven days a week.  So CVS is already the biggest retail clinic in the country.

According to CB Insights, 82% of the US population, or 260 million Americans, live within a ten-mile radius of a CVS store. If sealed, this ambitious deal will seek to build a Community Health Hub into 9,700 of CVS locations.  Aetna’s CEO Mark T. Bertolini refers to these hubs as "America's front door to quality health care." He added: “We want to get closer to the community because all health care is local.” Not only will this mean better access to care, it will also impact the costs. A Wall Street analyst predicts that both Minute Clinics and Community Health Hubs have potential to lower health spending — if, for example, CVS can push customers to use walk-in clinics instead of emergency rooms for minor problems.

Pain Point 2 – “It’s the data, stupid…” A big driver of healthcare costs is the lack of data integration across diverse service providers, insurers, and pharmacies.  Integration between CVS and Aetna can result in more customized healthcare delivery to patients. The Economist reports that the combined firm would offer everything from basic health services to diagnostics to drug-infusion centers. The merger also merges the incentives to ensure customers access to primary care, vaccinations, medical information, prescriptions, and follow-ups. “Consumers would save through lower premiums, lower out-of-pocket spending at preferred CVS outlets, or both,” reckons Adam Fein of Pembroke. Combining this data with big data analytics will also galvanize a wave of innovation in personalized medicine.

Pain Point 3 – Too Much Bureaucracy  Hundreds of millions of dollars in communications costs are spent every year just making sure that pharmacies and insurance companies are on the same page for every customer.  And the healthcare system is full of bureaucratic bloat that could be slashed with streamlined processes and increased data integration.  The benefits of removing the Pharmacy Benefit Management fee alone could be enormous.  According to the Economist this vertical integration would remove the rent-seeking middlemen, which in theory could lead to more choice, better health outcomes, and lower prices for consumers.

So what can your healthcare organization do, short of buying another conglomerate?  Our experience has shown that almost any healthcare organization can take on these three challenges to make a big difference for their customers AND their bottom line.

  • Get Next to Your Patients You don’t need a giant merger to increase your reach. It is impractical to simply invest in new physical locations, and keeping up with CVS’ reach will be impossible.  A plethora of other solutions to get closer to patients do exist though, from high-quality televisits to outreach on mobile devices and wearables.  These solutions can also increase the speed of healthcare delivery, improve cost efficiencies, enhance patient satisfaction and increase revenues. According to American Well  20% of patients would switch their primary care provider to one that offers telehealth services if they could.

  • Know More about Your Patients Use big data analytics technologies to improve outcomes and decrease operating costs. Some current vendors solutions are not mature enough for implementation in large hospital settings, but our work with clients has shown how quickly you can evaluate your organization’s needs and readiness, market and vendor maturity, as well as benefits to determine whether this is a feasible solution. Then you can act.

More health systems are carrying out trials that rely on patient-generated health data to learn about your patients, identify and react more quickly to potential problems, decrease costs (such as readmission penalties), and increase revenues.  

Lean Up Your Operations Put in place efficient, low-overhead solutions that can minimize your patients’ financial pain. There are a wide range of strategies and techniques you can apply to realize this: from bill consolidations to flexible payment plans, to assuring your bills are error-free and easy-to-understand for your patients.

You can also decrease costs to collect by optimizing the back office operations, incentivizing patients to pay using low-cost payment options, and consolidating your card processors. And you can eliminate the waste generated from unnecessary business and administrative processes by creating a customer-focused organization step-by-step.

Taking into consideration the big unknowns both regarding the deal as well as the future shape of healthcare, we recommend you take on an agile approach, staying nimble while testing out the kinds of solutions we’ve laid out above.

This merger aims to replicate an integrated healthcare system, where patients will have one-stop-shop access to physicians, hospitals, pharmacies, and insurance coverage. infoedge has done this for our clients without a big merger, and we’d love to share our experience with you and trade ideas on how your organization will be impacted by the CVS-Aetna deal, and be inspired to perform in the coming years.


bottom of page