Hartford
Courant (CT) December, 5, 2019
A year
after its historic acquisition of Hartford-based Aetna, Inc., CVS Health Corp.
remains bullish on Hartford, making good on its commitment to maintain a local
workforce of about 6,000 and planning to roll out expanded health services at
some pharmacies in Connecticut, beginning in Hartford this spring.
“I’ll
underscore the point that we made a year ago that keeping Aetna’s headquarters
in Hartford as a center of excellence for our insurance business,” Larry J.
Merlo, CVS chief executive said, in an interview with The Courant.
“Importantly, we are continuing that terrific work that the Aetna Foundation
has done in terms of continuing to honor civic contributions.”
CVS
agreed to keep Aetna’s headquarters in Hartford for at least 10 years and
maintain the health insurer’s workforce for at least four years as part of its
approval for the $69 billion acquisition. The deal closed in November, 2018.
Aetna
-- as a designated “center of excellence” for CVS -- could emerge as critical
to the company’s plans for the future as it uses data maintained by the
Hartford insurer to identify potential health warning signs in patients
earlier, avoid more expensive treatment and thus, push down the overall cost of
health care.
Merlo
said it is possible Hartford could benefit from the transfer of other CVS
businesses to the city.
“I
would not rule that out as we go forward,” Merlo said. “That’s something we’re
continuing to look at as we evaluate our future needs.”
Merlo
said CVS will keep its corporate headquarters in Woonsocket, R.I. In addition
to Hartford, CVS also has centers of excellence in Chicago, Dallas, Phoenix and
New York.
While
Merlo this week celebrated the first anniversary of the corporate combination,
health industry analysts say the integration is still in the early stages.
“The
first year of a managed care business, in a lot of ways not much should have
gone wrong,” Lance Wilkes, a senior analyst at Sanford C. Bernstein in New
York, said, noting that health insurance contracts are already in place.
“How
you are going to manage the business and how Aetna historically managed the
business, you will start to see the impacts in 2020 and 2021," Wilkes
said.
So far,
at least, investors appear pleased at what they have seen. CVS shares have shot
up nearly 50 percent since April, after initial fears about weakness in the
pharmacy benefit business and the pharmacy retail business -- neither directly
related to the merger -- receded in the minds of investors.
A new
vision for CVS
The
merged companies also have aggressively pressed forward laying the groundwork
for a vision CVS says has the potential to transform the health care industry
and help put the brakes on the soaring costs for care.
In
June, CVS announced that it would retrofit 1,500 of its pharmacies across the
country to incorporate “HealthHUBs” to provide more health care services in the
next two years. The push comes after opening 50 in Houston, Tampa, FL, Atlanta
and Philadelphia this year.
The
first in Connecticut will open this spring in Hartford at a location that has
yet to be determined, the company says.
HealthHUBs
expand on the the strategy of CVS’s walk-in MinuteClinics to make CVS locations
a true health care destination, going well beyond the traditional role of the
pharmacy, the company says.
“The
HealthHUB would include a MinuteClinic with expanded capabilities to not just
diagnose acute illness but to provide for management of chronic disease,” Merlo
said.
Merlo
said the expanded locations could do blood tests, offer dietary and nutrition
services, “wellness” rooms for groups on health topics and a “concierge” to
help customers better understand their health benefits.
Merlo
said CVS strategy is built on the vision that health care has to be local and
where people are, “whether it’s in the community, the home, or even now, in the
palm of your hand.”
CVS
also sees the opportunity to use health data from Aetna to not only help
customers stay on their health plans, but get to them earlier to head off more
serious troubles and costly hospital stays.
Merlo
said CVS is starting to develop a plan to use the health data. Traditionally, a
telephone call from Aetna might have been placed to a plan member about
coverage, but that has been found to have a marginal impact.
In the
future, the local pharmacist filling a prescription might see that a customer
is overdue for a diagnostic test and talk directly to the customer, Merlo said.
CVS has
pharmacies in 10,000 communities nationwide and, according to the company,
about 70 percent of the U.S. population lives within 3 or 4 miles of a CVS
pharmacy.
But
changing patient behavior might not be as easy as it might sound for a
population -- especially an aging one -- that is more comfortable going to
their primary care physician, said Spencer Perlman, a health care policy expert
at Veda Partners in Bethesda, MD.
Perlman
said he sees CVS providing care for routine illnesses, say a sore throat, but
if there is something more serious, would a patient take the diagnosis of a
nurse practitioner in a Minute Clinic or say, “Hey I should really go to my
doctor.”
CVS
could clearly make headway with its model but it will only be able to go so far
without bringing primary care physicians into the equation, Perlman said.
Sanford
Bernstein’s Wilkes said he expects physicians will be brought into the
HealthHUBs. That would be similar to pilot programs already being tested by
both department store giant Walmart and pharmacy competitor Walgreens outside
of Connecticut.
“They
can just take the step from going from 1,100 MinuteClinics to 1,500 HealthHUBs
and once they are a little further along with that, then they can start to
deploy the next step, which is what I would expect,” Wilkes said.
Changing
health care
Merlo,
63, is a former pharmacist who joined CVS in 1990, the year the pharmacy chain
where he worked was bought by CVS. He rose through the ranks to head retail
operations and was named CEO in 2011. He won over skeptics of his ascension to
CEO after turning around the troubled acquisition of Caremark, the pharmacy
benefits manager.
The CVS
pharmacy juggernaut has come under criticism for crowding out rapidly
disappearing independent pharmacies. Merlo said there is a role for the
independents to play, but Merlo sees CVS’ place in the health care landscape as
far different.
“That
speaks to going beyond just dispensing prescriptions to performing some of the
[things] to help someone on a path to better health,” Merlo said.
Merlo
said he also sees private companies like his as on the forefront of innovation
and thus key to the future of health care -- despite talk during the
presidential campaign about single-payer health care system.
Meanwhile,
Merlo says CVS is making good on its announcement earlier this year to invest
$100 million over the next five years in communities served by its pharmacies.
The
goal is to promote health and wellness, including non-medical influences on
health such as housing and education. The program continues the Aetna
Foundation’s “Healthiest Communities” initiative.
As part
of the $100 million program, CVS will announce a $1 million grant over five
years, split between the Boys and Girls Club in Hartford and Providence.
Merlo
also praised the community involvement and volunteerism ingrained in both the
CVS and Aetna cultures.
“Aetna
employees, much like CVS employees are very focused on giving back and
regularly volunteering,” Merlo said. “Just in Connecticut, Aetna employees
volunteered more than 100,000 hours over the course of the year.”
Kenneth
R. Gosselin can be reached at kgosselin@courant.com.
(c)2019
The Hartford Courant (Hartford, Conn.)
Visit
The Hartford Courant (Hartford, Conn.) at www.courant.com
Distributed
by Tribune Content Agency, LLC.
https://insurancenewsnet.com/oarticle/a-year-after-buying-aetna-ceo-larry-merlo-says-cvs-is-committed-to-hartford-and-transforming-health-care-with-revamped-pharmacies?utm_source=Newsletter&utm_medium=email&utm_content=subscriber_id:&utm_campaign=Health20191205#.XemW--hKiUk
No comments:
Post a Comment