Why hospitals should be worried about the CVS-Aetna megamerger

CVS pharmacy
The CVS-Aetna deal may prove to be hazardous to the health of the nation’s largest hospital operators. (Mike Mozart / CC BY 2.0)

The CVS-Aetna deal may be bad news for the nation’s hospitals.

Although many hospitals now operate urgent care centers, the megamerger will give the retail pharmacy 22 million health plan members who can take advantage of its 1,100 retail clinics, notes Forbes.

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CVS intends to expand its retail clinic model and will make room for one-stop shopping for wellness, clinical and pharmacy services, vision, hearing, nutrition, beauty and medical equipment. Its goal is for its locations to serve as “community-based health hubs” that can answer patients’ questions about prescription drugs, insurance coverage and their own health conditions.

But Forbes contributor Bruce Japsen said this model may prove to be hazardous to the health of the nation’s largest hospital operators. Many hospitals admit they haven't lowered costs enough to remain competitive to insurers and consumers, according to the article. And CVS already has a large geographic reach of 9,600 retail pharmacies that include 1,600 Target pharmacies. Aetna’s provider network (PDF)  includes 5,700 hospitals (out of 1.3 million providers total).

Its goal will be to keep patients out of the hospital as much as possible, he said. 

Shannon Monnat, chair of Syracuse University's Lerner Center for Public Health Promotion, told the publication that the deal has the potential to reduce healthcare costs, the burdens on ERs and delays in care that often leads to severe illnesses and higher costs.

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Primary care providers also have reason to worry. Retail clinics are already a threat to practices as many consumers rely on the walk-in care facilities for speed and convenience. Last year Angela Patterson, chief nurse practitioner officer, MinuteClinic and vice president, CVS Health, said the retailer considered itself a “safety-net for primary care.”

“We see ourselves as the access point when the patient can’t see their PCP [primary care provider] because they are traveling or can’t get an appointment or for the medically homeless,” she said.

But the new deal may prove costly to physician practices as it increases competition and provides more choice for patients who need preventive care and urgent care services.