Category Archives: Aetna

The Disruptors are Coming: The New Health Economy and the Medical-Industrial Complex

A big shout out to Dr. Don MCanne for his Quote of the Day post Friday for today’s topic, and a belated shout out to him for his post last Tuesday about the gains from the ACA being reversed. See my post, ACA Gains Reversing.

This time, Don alerts us to the impact the new health economy disruptors will have and what it might mean for the push towards single payer health care.

Last month, the PwC Health Research Institute (HRI) released a report analyzing the new health economy landscape as more and more companies pursue acquisitions of companies in the insurance, pharmacy benefit management, health care services and retail spaces.
In the last six months, the report states, there has been an explosion of unusual deals between companies such as CVS Health buying Aetna, Cigna buying Express Scripts, UnitedHealth’s Optum buying DaVita Medical Group (Kidney disease and dialysis), Albertsons agreeing to merge with Rite Aid, as well as the much highly publicized partnership between Amazon, JP Morgan, and Berkshire Hathaway.

Naturally, these aren’t the only deals that have occurred. Last year, 67 deals occurred in the US health services market, including payers and providers, the report adds.

The value of these deals increased 146% over those in 2016. The US health care industry, the report states, is undergoing seismic changes generated by a collision of forces: the shift from volume to value, rising consumerism, and the decentralization of care.
The HRI identified four new archetypes of companies engaged in this new health care economy:

• Vertical integrators — CVS & Aetna, Optum & DaVita, Cigna & Express Scripts
• Employer activists — February 2016, 20 US companies form Health Transformation Alliance (HTA) and developed tools to help its members cut employee healthcare costs. In January, Amazon, JP Morgan and Berkshire Hathaway partnered to lower costs and improve employee satisfaction
• Technology invaders — Amazon selling over-the-counter medical products, offering discounted access to Prime service, Apple’s newest operating system allows users to access parts of their EHRs on their phones
• Health retailers — CVS, Walgreens, Walmart, Albertsons and others using their network of store locations, consumer insights, national and global supply chains, and national (and sometimes global) branding to attract consumers looking for affordable, convenient care and goods

The HRI report recommends that all healthcare companies should make the following moves:

• Invest in customer experience
• Plan for a broader workforce
• Focus on price

This is how Don McCanne commented on this report. He wrote that Arnold Relman, like Dwight Eisenhower did about the military-industrial complex, warned us about the medical-industrial complex, but did not realize how intense the disruption would be in health care that the HRI report discusses.

According to Don, we are about to see a takeover by the disruptors who “have a leg up on many established health players in understanding consumers and tailoring experiences for them.”
The disruptors are “positioned to address price through greater scale, ownership of middlemen and a wider grip on the US health system value chain.”

If you don’t believe Don, then read what Jamie Dimon, the CEO of JP Morgan said, “To attack these issues, we will be using top management, big data, virtual technology, better customer engagement and the improved creation of customer choice (high deductibles have barely worked). This effort is just beginning.”

This is exactly what the Waitzkin et al. book describes when explaining the methods used by the medical-industrial complex to control and direct the American health care system for power and profit of the members of the complex.

Dr. McCanne observes that it is almost as if the physicians, nurses and other health care professionals and the hospitals and clinics in which they provide their services have become a peripheral, albeit necessary, appendage to their wellness-industrial complex that is displacing our traditional health care delivery system and its more recent iteration of the medical-industrial complex.

In other words, the physicians and nurses and other professionals have become proletarianized, and the hospitals and clinics merely the places where the medical-industrial complex derives its power and profit from.

Dr. McCanne posits the following questions as to what the health care system would look like once the transformation is well along:

• Once the silos of the health care system are flattened, how will health care be financed?
• Will there still be networks?
• Cost sharing barriers such as high deductibles?
• Will it be possible to fund this expansive model of the wellness-industrial complex through anything remotely resembling an insurance product, especially when the insurers are being amalgamated into what was formerly the health care delivery system?
• And now that the plutocracy is in control, how could we ever remove the passive investors that extract humongous rents through the wellness-industrial complex?
• And what about the patients? Did we forget about them?

It is obvious from his comments that this new health economy is going to be more problematic for providing universal health care to all Americans and will only make things worse. His Rx is to begin now to move to a single payer, Medicare for All program, and not worry about what has passed.

Smart diagnosis and prescription.

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EHR Vendor to Benefit from CVS/Aetna Merger

An article here from Healthcare IT News.com discusses how a CVS partner, Epic Systems, will benefit from the merger between CVS and Aetna.

The article reports that this signals a new era in analytics, interoperability, and population health.

According to Healthcare IT News.com, CVS is the biggest pharmacy chain in the U.S. by a number of locations and prescription revenue, Aetna is the nation’s third-largest insurance company. Epic Systems, which was not a party to the merger, but has been a CVS partner since 2015, is the largest electronic health record vendor.

The deal, according to the article,  stands to have a transformative impact on how healthcare is delivered in this country. Data, and lots of it, given that CVS has 9,700 retail locations and more than 1,100 walk-in clinics nationwide, was clearly a huge driver for the deal.

Epic’s vice president of population health, Alan Hutchinson, said that by using Epic’s Care Everywhere and Share Everywhere interoperability tools, CVA and Aetna could provide the rest of the community with information and insights to improve care.

“What’s really interesting about working directly with payers, providers, and patients is the ‘gray space’ – the opportunity that exists between traditional sites of care and all of the other organizations that are involved in the patient’s healthcare experience,” Hutchison said.

David Anderson, a research associate at Duke University Margolis Center, said in a recent blog post, “I can think of using the CVS retail data as a population health monitoring service, I can think of using the over the counter sales data tied to individuals to fuel predictive models for future opioid issues, or arthritis flares, or pulmonary hospital admissions or one hundred other things,”

He went onto say, “So from my former point of view as an insurance data geek, this merger offers an incredibly rich vein of data that can be mined and minted.”

The fundamental aim of the merger, is the management of chronic diseases through patient engagement, telehealth, and remote monitoring.

Aetna CEO Mark Bertolini said, “I think you have to think of it as keeping people away from the medical-industrial complex by offering better services in the home by meeting social determinants of health, which are big drivers of healthcare expenditures today, much bigger than people understand.”

Larry Merlo, CEO of CVS Health said the arrangement will enable the combined company to deliver services that many hospitals currently do not.

Follow-up to CVS to Buy Aetna

As I reported last month, and in today’s New York Times and Wall Street Journal, CVS has agreed to buy Aetna for $69 billion, reshaping the US health care industry, according to the Times article.

The transaction, the article said, is one of the largest of the year, and would combine the drugstore giant with one of the biggest health insurers in the US. It would blur the lines between traditionally separate spheres of the health care industry.

This move by CVS is response to moves by Amazon, which has quietly laid the groundwork for an entry into the United States’ pharmacy business.

According to the Wall Street Journal article, Aetna stockholders will receive $207 a share, $145 in cash and 0.8378 of a CVS share, or $62 in stock.

 

CVS to Buy Aetna

This should wake you up before your morning coffee.

Reuters is reporting that pharmacy operator, CVS Health Corp. is making a bid for Aetna Insurance.

Bid is more than $66 Billion.

Here is the article from Reuters.

Do we really think a pharmacy should own an insurer? What ever happened to the idea of competition is good?

One day, we will live in a world like that of the movie, Rollerball (the one with James Caan), where corporations run the world, and your wife can be taken anytime by a corporate executive.

Blocked Aetna-Humana Merger Reveals True Reason for Pullout from ACA

In an article yesterday in Business Insider, the recently blocked merger between Aetna and Humana is the reason given for Aetna’s sudden decision to leave the ACA exchanges.

Contradictory statements from Aetna in response to this decision, as to their ability to profit from the merger or not profiting from the exchanges, does not hide the fact that the bottom line is this:

The laws of Capitalism are incompatible with the goals of providing health care to everyone, even with all the fancy commercials and advertisements from the insurance companies that they are there for you.

BS!

They are not there for you, unless you are a top executive of the company, or a stockholder or shareholder, or investor. As the article states, this merger would have led to a consolidation of the health care industry to only three mega companies.

Do you want to wait until there is only one, a la the 1970’s movie, “Rollerball”, where corporations have dominated whole industries and replaced nations, or do you want to provide health care to all, no matter what their ability to pay, or if it makes a profit for some greedy bastards?

The choice is up to you.

Here is the link to the entire BI article:

http://www.businessinsider.com/aetna-humana-merger-reason-for-leaving-obamacare-2016-8