Is CVS Buying Aetna? What You Need to Know About the Mega-Merger
In 2017, CVS Health, a giant drugstore chain and prescription drug insurer, announced that it was buying Aetna, one of the nation’s largest health insurers, for $69 billion. The deal was approved by the Department of Justice in 2018, marking the start of a new era in health care. But what does this merger mean for consumers, providers, and the health care industry? Here are some key points to understand:
Why did CVS buy Aetna?
CVS and Aetna said that their merger was driven by a vision to transform the consumer health experience and build healthier communities through a new innovative health care model that is local, easier to use, less expensive and puts consumers at the center of their care. By combining CVS’s pharmacy and clinic services with Aetna’s insurance network, the merged company aims to offer more integrated and coordinated care, especially for people with chronic conditions such as diabetes, hypertension and asthma. CVS CEO Larry Merlo said that the merger could also help lower health care costs by reducing unnecessary hospitalizations and emergency room visits.
How will the merger affect consumers?
The merger could have both positive and negative effects on consumers, depending on their insurance plan, pharmacy choice, and health needs. On the positive side, consumers could benefit from more convenient access to health care services at CVS’s 9,700 pharmacy storefronts and 1,100 Minute Clinics across the country. CVS said that it plans to expand its offerings to include more preventive care, chronic disease management, wellness programs, and telehealth services. Consumers could also save money by using CVS’s preferred network of pharmacies and clinics, which could offer lower copays and discounts. On the negative side, consumers could face less choice and competition in the health care market, as the merger reduces the number of major players in the industry. Some consumers could also face higher premiums or out-of-pocket costs if their insurance plan or pharmacy is not affiliated with CVS-Aetna. Consumers should check with their insurer and pharmacy to see how the merger will affect their coverage and costs.
What are the challenges and opportunities for the merged company?
The merger is not without risks and challenges for CVS-Aetna. The company will have to overcome regulatory hurdles, legal challenges, operational complexities, and cultural differences to successfully integrate its two businesses. The company will also have to compete with other powerful players in the health care industry, such as Amazon, Walmart, UnitedHealth Group, Cigna-Express Scripts, and Walgreens-Boots Alliance. However, the merger also presents opportunities for CVS-Aetna to leverage its scale, data, technology, and innovation to create a differentiated value proposition for consumers and providers. The company could also use its influence to shape health care policy and drive social change in areas such as opioid abuse prevention, tobacco cessation, and health equity.
The CVS-Aetna merger is one of the biggest deals in health care history that could reshape the industry and affect millions of Americans. The merger promises to create a new health care model that is more convenient, integrated, and affordable for consumers. However, it also raises concerns about market concentration, consumer choice, and health care costs. The ultimate impact of the merger will depend on how well the company executes its strategy and how consumers and providers respond to its offerings.