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CVS-Aetna Merger A Bid To Bring Down Costs, Gain Competitive Edge

Cars sit parked outside of a CVS Caremark Corp. store in Dallas. (Ben Torres/Bloomberg via Getty Images)

What A CVS-Aetna Merger Could Mean For Customers

Chad Terhune, a senior correspondent for California Healthline, joined KPCC’s Take Two on Dec. 4, 2017, to explain what this deal may mean for consumers and the health care industry.

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Consumers might start to see some dramatic changes inside their neighborhood pharmacy.

CVS Health Corp. announced that it has agreed to buy health insurance giant Aetna Inc. for $69 billion. The combined companies aim to put the retailer’s nearly 10,000 stores to better use delivering medical care that’s more convenient than what’s available from many doctors’ offices and hospitals.

Aetna’s chief executive, Mark Bertolini, has noted that many people see their pharmacist more than their doctor, and argues that those visits are a missed opportunity to address patients’ chronic conditions, such as diabetes and asthma, and keep more people out of the hospital. Consumers have seen a glimpse of this at CVS’ MinuteClinics, where nurse practitioners treat infections, sprains and handle other preventive care such as immunizations.

Many health insurers and employers encourage people to use those clinics, in some cases waiving copayments. Under this deal, the companies also have hinted at offering lab tests, dialysis, medical equipment and discharge planning after a hospital stay.

By teaming up, CVS and Aetna vow to improve people’s health and drive down the crushing cost of U.S. health care. However, the prospect of further industry consolidation alarms some consumer advocates, who say cost savings from a big merger rarely get passed on to the average customer. Federal antitrust officials are sure to scrutinize this deal closely in the months ahead.

This merger also comes in response to pressure from competitors — new and old. Online retailer Amazon is eyeing the pharmacy business, and there were reports last week about the company exploring potential deals with makers of generic drugs to speed its entry into the market.

CVS and Aetna also have another huge competitor on their minds: UnitedHealth Group. The nation’s largest health insurer has successfully diversified and extended its reach deep into America’s medicine cabinets, operating rooms and doctors’ offices through several acquisitions.

What remains to be seen is whether this deal passes muster with a Trump administration and if it triggers more mega-mergers in the health care sector.

Chad Terhune, a senior correspondent at California Healthline and Kaiser Health News, appeared Monday on KPCC’s “Take Two” show to discuss with host A Martinez what this deal may mean for consumers and the health care industry.

This story was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

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Cost and Quality Health Industry Multimedia