Horizontal integration of health care

Photo by Maria Kaloudi

As someone who has been in the health care system for far too long, I can tell you we are not in a great place. Beyond the physical pain I have experienced, I have anxiety and fear about my financial future after receiving bills for a multitude of services I did not agree to or even know about.

The resounding reason for this is that we Americans live in a volume-based system where an exceedingly large number of sole providers charge individually for their services. Unfortunately, receiving more care does not ensure better patient results, and it definitely does not lower patient costs.

But the future is not as bleak as it seems. With a potential merger between CVS and Aetna on the horizon, we could see a consolidation that works for both patients and insurers alike. We have already seen positive steps with government-run programs, and with a new horizontal integration of CVS and Aetna we could see a greater push to a value-based health care system in the private sector as well — one with more unified pieces and better communication, improving quality and outcomes for the end users.

For Aetna, the nation's third largest insurance provider, hampered by the lack of growth from the Affordable Care Act, this is a new avenue for expansion — one that can gain them a foothold beyond doctors’ offices and hospitals. CVS, the country’s second largest chain drug store, is looking at the merger as a way to expand its footprint before Amazon enters the health care space.

With almost 10,000 brick and mortar stores all over the U.S, CVS could add Aetna’s 20 million-plus members in hopes of driving those customers to their stores and walk-in clinics. That would allow them greater control of members’ care from start to finish, — from the doctors’ visit to prescriptions and everything in-between — almost like an advocate in the patients’ corner advising them of what is needed and what is not.

CVS may well be doing this to help improve the retail aspect of their stores, but pharmacy sales still account for 75 percent of their business. That number likely won't change too drastically until health care prices drop and there is a zero dollar copay for your candy bar.

So, if you live in Texas, a state that hasn't expanded Medicaid and has the highest uninsured population in the country, help could be on the way. Either the Republican-led government will be able to approve some kind of skinny plan to get more enrollees or this new consolidation plan will work, lowering heath care costs and premiums to make care more affordable. Hopefully it’s the latter, but there is no doubt that greater access and better integration will lead to vast improvements in care.

The more large players that enter and change the health care space, the more they bring about new competition and help reduce inefficiencies. I never thought I would be advocating for a top-down approach to help patients, but here we are. Next question: What does Walgreens do?

Joshua Feldman

Project manager, New Benefits

@jfeldman831

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