Consumer access at the heart of CVS-Aetna deal

The proposed merger between Aetna and CVS Health would give the combined organization unprecedented access to the consumer, according to Dr. Harold Paz, executive vice president and chief medical officer of Aetna.

The driving force behind the marriage between the No. 3 health insurer and the pharmacy giant is steering patients to accessible, lower-cost care via 1,100 CVS walk-in clinics. Nearly 70% of the U.S. population lives within 3 miles of a CVS pharmacy.

Tracking consumers more closely could produce dividends. There is about $1 trillion of waste in the $3.3 trillion healthcare system; around $600 billion is administrative while about $400 billion is clinical, Paz said at the Avia Network Summit in Chicago.

There is opportunity to repurpose that money for behavioral health services and addressing the social determinants of health, he said.

"We could take that waste, repurpose it and create a tremendous value proposition," said Paz, who was CEO of Penn State Hershey Medical Center and Health System prior to joining Aetna. "Companies that get there first will do exceptionally well."

The merger provides an opportunity to partner with community physician groups, hospitals, clinics, Meals on Wheels, behavioral health agencies, social service groups and government organizations to build out ecosystems that deliver healthcare in the most affordable way, Paz said.

"There is an opportunity to look at health and wellness and start in individuals' homes and identify the best place, the right time and the right individual to address those needs," he said. "For some, it might be through Aetna Care in New Jersey where nurses come to a patient's house—what is important is that we have engagement."

Aetna is developing a three-pronged approach to improve care, the first being consumer engagement.

The Hartford, Conn.-based insurer has a pilot program in New Jersey that sends medical professionals to peoples' homes to see if they are taking their medicine, eating the right food and have access to a doctor.

Aetna also has a partnership with the grocer ShopRite where a nutritionist will walk a consumer through the grocery store to help them eat healthier, Paz said.

That feeds into the second pillar—ensuring that the patient is well prepared when he or she visits the doctor.

The organization follows up with patients to connect them with a primary care physician or hospital through traditional means or through telehealth or home health services, Paz said. But the digital platform needs to be interoperable and allow the patient to analyze his or her own health information, he said. Still, this assumes that patients have the motivation and incentive to take action.

Aetna is developing a wellness assessment tool with the Harvard School of Public Health to measure social connectedness, an individual's purpose, and his or her self-esteem and character, which are all closely linked to a person's health, Paz said.

The third pillar is shared risk. Aetna has value-based contracts with Merck, Novartis, Medtronic and others that base payment on outcomes. Merck, for instance, added medication adherence tools to Aetna's home care platform to improve outcomes, Paz said.

"This is an opportunity for everyone in the healthcare ecosystem to share the financial risk on outcomes," he said.

The highest-voted question that the audience posed was, CVS is to Aetna as Amazon is to (blank). Is that your new competitor?

The audience also wanted to know what are the biggest hurdles to the Aetna-CVS deal, how blurred will the lines between insurer and provider become, will the merger produce opportunities to expand precision medicine, and will the merger reduce episode costs and/or increase margins for the risk bearer.

"The lines between insurer and provider are blurring," said Paz, adding that "everything is heading in that direction."

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Alex Kacik

Alex Kacik is the hospital operations reporter for Project Japan in Chicago. Aside from hospital operations, he covers supply chain, legal and finance. Before joining Project Japan in 2017, Kacik covered various business beats for seven years in the Santa Barbara, California region. He received a bachelor's degree in journalism from Cal Poly San Luis Obispo in Central California.


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