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CVS to buy Aetna for $69BB

2,962 3,804 December 3, 2017 at 11:17 AM Get Los Angeles Times Coupons
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I guess the rounding down of CRTs really does pay off...

http://www.latimes.com/business/l...story.html

Pharmacy giant CVS Health has agreed to buy Aetna in a $69 billion blockbuster acquisition that could rein in health care costs and transform its 9,700 pharmacy storefronts into community medical hubs for primary care and basic procedures, people familiar with the deal said Sunday.

The pharmacy chain agreed to buy Aetna for about $207 per share or $69 billion.

If approved by regulators, the mega-merger would create a giant health care company, allowing CVS to provide a broad range of health services to Aetna's 22 million medical members at its nationwide network of pharmacies and walk-in clinics, and further decrease the drug store titan's reliance on the retail sales that have faced increasing competition.

And the deal is likely to set off even more mergers in the health-care industry, which has been undergoing consolidation and faces potential new competition from Amazon.
"I think it will create more consolidation among the insurers and retailers, blurring the lines," said Ana Gupte, an analyst at Leerink Partners, who recently pointed to retail giants Walgreens Boots Alliance or Walmart as potential "dark horse acquirers" of the health insurer Humana.

Wall Street analysts have said that the deal could lower health spending -- if, for example, CVS can push customers to use a walk-in clinicsinstead of an emergency room for minor problems. But consumer advocates argue the deal would limit consumer choice and could make it even harder for new companies to enter into a market increasingly dominated by behemoth companies.

Even before the announcement, the familiar drug store chain has been a dominant player in the big business of negotiating drug prices for insurers and employees. The merger would give CVS an even broader role in managing health care.
CVS-Aetna deal could have same result as telecom mergers — higher prices

The combined company could leverage massive amounts of data from both Aetna's medical claims and CVS's vast number of touchpoints to consumers, including its 9,700 retail stores and 1,100 MinuteClinics.

CVS could turn those locations into a kind of community health hub, where pharmacists and nurses provide follow-up and monitoring to patients recently released from hospital -- and so help avoid re-admission. (Hospital readmissions are a growing cost in healthcare).

The storefronts could also transform preventative care, offering wellness, nutrition and even imaging services -- saving costs by keeping people healthier and providing care in a lower-cost setting than a hospital.

Pharmacists and nurses could help make sure patients with chronic diseases stay on their meds, which would keep those conditions easier to manage than when they rage out of control.

"Every health insurance company wants to get closer to the consumer," said Dan Mendelson, president of Avalere Health, a consulting firm. "If a patient is better off by getting a home health visit to have someone go through their medications to take them off 10 and eliminate those medications, I want that to happen -- as opposed to someone just filling prescriptions."

The merger would also better insulate CVS and Aetna against looming competition on two fronts.

The mere possibility that Amazon will soon begin selling drugs has shaken the stocks of companies up and down the drug supply chain, from wholesalers to pharmacies. The deal would expand CVS's business beyond the business of selling drugs and negotiating drug prices, to managing all aspects of a patient's entire health care -- and could shift its storefronts to become medical hubs, rather than aisles stocked with consumer goods that people can easily buy in other stores or online.

The deal would also protect against competition from health insurers, particularly UnitedHealth Group, that have brought the business of negotiating drugs in-house instead of buying services from a middleman. It will effectively cut out the middleman in negotiating drug prices for health insurers, since CVS is that middleman today, and lock in Aetna's medical members for the pharmacy management side of CVS's business.
CVS and Aetna eye competition from Amazon, but the real race is with UnitedHealth

The health care space has already undergone considerable consolidation - but it has also faced challenges. Last year, two health insurance mega-mergers between Aetna and Humana and Anthem and Cigna crumbled under antitrust opposition. But a merger between companies that don't directly compete is thought by many to have a better chance.

"They're going to be able to offer you a better-functioning insurance package," said Craig Garthwaite, associate professor of strategy at Northwestern's Kellogg School of Management. "There's some sense in which we're seeing a reshuffling of the organizational structure, such that insurers are owning providers."

That fundamental restructuring is part of an industry-wide move away from managing different aspects of patient care - such as drugs or hospitalization - in isolation.

Martin Gaynor, a professor of economics and health policy at Carnegie Mellon University, said that while a CVS-Aetna merger didn't strike him as a deal that would clearly reduce competition, it wasn't clear why the companies needed to combine at all, since CVS already has Aetna's business as a pharmacy benefit manager.

"A big question mark for me is how does it make the merged company better," Gaynor said. "I wonder about a lot of these mergers, whether they're really driven by a true increase in value of the long-term value of the company -- as opposed to seeking a short-term bump in stock prices."

David Balto, a former policy director at the Federal Trade Commission who led a coalition opposing the insurance mergers, said that he thought the merger would reduce competition and harm consumers.

He pointed to the Justice Department's recent challenge of a different merger – between AT&T and Time Warner – as evidence that such mergers could raise antitrust concerns.

"For those people who have spent endless hours and long lines at CVS stores, trying to figure out how to meditate while standing, this merger is bad news. It means, increasingly, they're going to be forced into those long lines. CVS doesn't win points on service, and its these kind of vertical relationships that raise prices, and deny choices for consumers," Balto said.
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I heard about this. I think it STINKS. I don't think this should be allowed.
Conflict of interest or some rules/laws should kick in.

Nono1
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In the past couple of years our local CVS have shut about half of our Minute Clinics. In fact, there is no truly local choice here now, its about half hour drive to the nearest MC. Not sure how that jibes with their "mission" to "get closer to the consumer".
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Quote from monkeydawn
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In the past couple of years our local CVS have shut about half of our Minute Clinics. In fact, there is no truly local choice here now, its about half hour drive to the nearest MC. Not sure how that jibes with their "mission" to "get closer to the consumer".
From the article mike quoted:

The combined company could leverage massive amounts of data from both Aetna's medical claims and CVS's vast number of touchpoints to consumers, including its 9,700 retail stores and 1,100 MinuteClinics.

CVS could turn those locations into a kind of community health hub, where pharmacists and nurses provide follow-up and monitoring to patients recently released from hospital -- and so help avoid re-admission. (Hospital readmissions are a growing cost in healthcare).

The storefronts could also transform preventative care, offering wellness, nutrition and even imaging services -- saving costs by keeping people healthier and providing care in a lower-cost setting than a hospital.

Pharmacists and nurses could help make sure patients with chronic diseases stay on their meds, which would keep those conditions easier to manage than when they rage out of control.


Means lower end health care. Not doctors, but pharmacists and 'nurses' (??).
Sort of like Urgent Care but lower end, as not being able to provide services that Urgent Care does. CVS won't be able to prescribe (unless they have Dr's in pharmacies), so very limited care. Looks like just 'follow up' services.

I just don't like it in the anti-trust sense. Too many big companies are ruling the nest.
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Quote from marciadel
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I just don't like it in the anti-trust sense. Too many big companies are ruling the nest.
this country sucks right now with the people in power taking steps that can only further widen the income gap, but thats their objective, to ensure the rich keep getting richer. I guess just enough people drank the Kool Aid.
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I read the article and the only thing going through my head is:

I wonder if Aetna's (short-term disability) customer service lines will actually get better and not disconnect after 5 minutes of mashing buttons?
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Quote from marciadel
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Means lower end health care. Not doctors, but pharmacists and 'nurses' (??).
Sort of like Urgent Care but lower end, as not being able to provide services that Urgent Care does. CVS won't be able to prescribe (unless they have Dr's in pharmacies), so very limited care. Looks like just 'follow up' services.

I just don't like it in the anti-trust sense. Too many big companies are ruling the nest.
Nurses -- most likely as in nurse practioners, who are actually autonomous and authorized to prescribe without the supervision of a doctor in many states. The quality of care they provide at the primary care level has comparable outcomes as doctors (in studies when comparing a GP and NP with similar years of practice) and the level of patient satisfaction is actually higher. There is also a movement to allow pharmacists to prescribe. One of my local grocery store with an in-store pharmacy (Giant, of the Stop & Shop family) has actually paired with the local medical center (Anne Arundel Medical Center), so there is a clinic in-store staffed with a NP.

My concern was the anti-trust issues, if it would pass muster to actually happen.
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Quote from marciadel
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From the article mike quoted:

The combined company could leverage massive amounts of data from both Aetna's medical claims and CVS's vast number of touchpoints to consumers, including its 9,700 retail stores and 1,100 MinuteClinics.

CVS could turn those locations into a kind of community health hub, where pharmacists and nurses provide follow-up and monitoring to patients recently released from hospital -- and so help avoid re-admission. (Hospital readmissions are a growing cost in healthcare).

The storefronts could also transform preventative care, offering wellness, nutrition and even imaging services -- saving costs by keeping people healthier and providing care in a lower-cost setting than a hospital.

Pharmacists and nurses could help make sure patients with chronic diseases stay on their meds, which would keep those conditions easier to manage than when they rage out of control.



Means lower end health care. Not doctors, but pharmacists and 'nurses' (??).
Sort of like Urgent Care but lower end, as not being able to provide services that Urgent Care does. CVS won't be able to prescribe (unless they have Dr's in pharmacies), so very limited care. Looks like just 'follow up' services.

I just don't like it in the anti-trust sense. Too many big companies are ruling the nest.
My 'doctor's' office no longer has any doctors practicing there. Only nurse practitioner's as of a year or two ago and they prescribe meds. And the most interesting thing I found is that the office charges more for a visit with the NP than they did for a doctor (I had two visits fairly close together - one with the doctor and a follow up with the NP after the doctor was gone) and our insurance allows a higher fee also (both visit fees get reduced by insurance as the practice is 'in network'). I think it's because the NP visit is usually longer as she tends to take more time with a patient than the doctor did.
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Quote from yensshopper
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My 'doctor's' office no longer has any doctors practicing there. Only nurse practitioner's as of a year or two ago and they prescribe meds. And the most interesting thing I found is that the office charges more for a visit with the NP than they did for a doctor (I had two visits fairly close together - one with the doctor and a follow up with the NP after the doctor was gone) and our insurance allows a higher fee also (both visit fees get reduced by insurance as the practice is 'in network'). I think it's because the NP visit is usually longer as she tends to take more time with a patient than the doctor did.
Thats a good thing! (that she takes a longer time with you)
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Quote from StrawberryWine
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Nurses -- most likely as in nurse practioners, who are actually autonomous and authorized to prescribe without the supervision of a doctor in many states. The quality of care they provide at the primary care level has comparable outcomes as doctors (in studies when comparing a GP and NP with similar years of practice) and the level of patient satisfaction is actually higher. There is also a movement to allow pharmacists to prescribe. One of my local grocery store with an in-store pharmacy (Giant, of the Stop & Shop family) has actually paired with the local medical center (Anne Arundel Medical Center), so there is a clinic in-store staffed with a NP.

My concern was the anti-trust issues, if it would pass muster to actually happen.
Good to know, thanks for info on NP's! (Article didn't specify if they would be Nurse Practioners. )
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Just want to say first there are too many big companies. On the other hand maybe it will free up the ER's a little. One of my daughters always has a hard time getting an appt for sore throat, ear infections. She goes to Convenient med and they are seen right away. Other daughter didn't call in time for a camp physical, went to the same place and paid $20 out of pocket
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I want to thank evertyone on the Shaw's chat thread that donated part of their stash and sent me coupons to help support DSIL unit. Also want to thank the people on SD...one as far as Texas that sent me coupons to help support the cause hug
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Quote from yensshopper
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My 'doctor's' office no longer has any doctors practicing there. Only nurse practitioner's as of a year or two ago and they prescribe meds. And the most interesting thing I found is that the office charges more for a visit with the NP than they did for a doctor (I had two visits fairly close together - one with the doctor and a follow up with the NP after the doctor was gone) and our insurance allows a higher fee also (both visit fees get reduced by insurance as the practice is 'in network'). I think it's because the NP visit is usually longer as she tends to take more time with a patient than the doctor did.
Office visits aren't billed by time, but by the number and complexity of issues addressed, as well as interventions required. A longer visit may result in more issues being addressed, which means higher billing, but at some point you run into the law of diminishing returns or the insurance company refusing to pay. There was probably some technical difference in the visits not apparent to you that allowed them to bill more. Otherwise an NP who regularly charges more than a doctor for similar type visits is gaming the system in dubiously legal ways.
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Quote from river
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Office visits aren't billed by time, but by the number and complexity of issues addressed, as well as interventions required. A longer visit may result in more issues being addressed, which means higher billing, but at some point you run into the law of diminishing returns or the insurance company refusing to pay. There was probably some technical difference in the visits not apparent to you that allowed them to bill more. Otherwise an NP who regularly charges more than a doctor for similar type visits is gaming the system in dubiously legal ways.
Since my EOB's do not list codes, I can't be 100% correct. That being said, as a diabetic I go for routine check ups every 3 to 4 months. These are the visits that get charged more now that I see the NP, which is all that is available at the office I go to. If I do happen to go to an office within the same practice further away from me for whatever reason (time of appointment available, etc.) and do happen to see a doctor there, the cost of the visit is less. I have no idea why, but I always thought it was kind of strange.
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Quote from yensshopper
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Since my EOB's do not list codes, I can't be 100% correct. That being said, as a diabetic I go for routine check ups every 3 to 4 months. These are the visits that get charged more now that I see the NP, which is all that is available at the office I go to. If I do happen to go to an office within the same practice further away from me for whatever reason (time of appointment available, etc.) and do happen to see a doctor there, the cost of the visit is less. I have no idea why, but I always thought it was kind of strange.
There are level 1-5 visits, the 5 being more complex. It is well known that undercoding is rampant (I went to a CEU course being taught by one of the most experienced Medicare billing/coding instructors with a bunch of doctors, way too often when presented with level 4-5 cases they would say they'd bill at 2 or 3), hospitals are trying to educate their providers because of so much lost revenue. There are also billing modifiers which makes this stuff so much more fun!

Here's a link with a little bit about the differences and how often things are billed (towards the bottom of the page are the links for level 2-5 info): https://emuniversity.com/Level1Es...tient.html
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Quote from StrawberryWine
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There are level 1-5 visits, the 5 being more complex. It is well known that undercoding is rampant (I went to a CEU course being taught by one of the most experienced Medicare billing/coding instructors with a bunch of doctors, way too often when presented with level 4-5 cases they would say they'd bill at 2 or 3), hospitals are trying to educate their providers because of so much lost revenue. There are also billing modifiers which makes this stuff so much more fun!

Here's a link with a little bit about the differences and how often things are billed (towards the bottom of the page are the links for level 2-5 info): https://emuniversity.com/Level1Es...tient.html [emuniversity.com]
Thanks for the link. It looks interesting. I'll check it out when I have some time.

ETA: I do see that one way a visit can be billed is based on face to face time so that may be why my NP's bill is higher than one for a doctor's visit.

Interestingly though, I had heard a few years ago that Medicare was reducing some of it's payments because just the opposite was happening - doctors, clinics, etc. were billing at the next higher level as they figured the patient would get there eventually. It was referred to a 'step up' billing or something like that.
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Last edited by yensshopper December 5, 2017 at 05:18 PM.
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