The healthcare industry is buzzing with Sunday’s announcement that CVS intends to buy health insurer Aetna for $69 billion. If the deal goes through (and success is far from assured), it would be the largest in healthcare history.

Combining the services of a pharmacy chain and health insurance company reflects two trends affecting the future of healthcare: taking care closer to the patient and businesses forming partnerships to become more cost-effective in an era of increasingly expensive healthcare.

Taking Care Closer to the Patient

Healthcare providers continue to find ways to make care more local, especially for non-emergency treatment. By localizing care with doctors-on-demand services, mobile pharmacies, and managing services within pharmacies, the industry is trying to keep patients out of hospitals, where treatment becomes more expensive.

As The New York Times discussed in coverage of the deal, Aetna could use CVS pharmacies and retail clinics to provide care directly to patients, and the combined company could be better able to offer employers one-stop shopping for health insurance for their workers. CVS Health’s Chief Executive Larry J. Merlo told The New York Times, “We think of it as creating a new front door to healthcare in America.”

As The New York Times noted, “It is the development of community-based clinics — capable of delivering care with the technology and health information available from both parties — that could prove to be the biggest change brought about the deal.”

New Partnerships Being Formed

No single company can make healthcare more affordable and efficient in today’s environment. So, business are forming networks to manage patient care. For instance, earlier this year on our blog we discussed how Walgreens Boots Alliance launched AllianceRx Walgreens Prime, a specialty pharmacy and mail services company. AllianceRX Walgreens Prime is composed of an alliance between Walgreens and Prime Therapeutics, a pharmacy benefit manager (PBM) owned by 14 Blue Cross Blue Shield plans. The company will compete with other PBMs such as Express Scripts and Optum Rx, which help their clients manage healthcare by negotiating deals to buy drugs at scale.

Meanwhile, Apple is creating relationships with healthcare providers to embed the Apple Watch as a device for better managing patient wellness care, as providers look for ways to help patients manage their health to keep them out of hospitals.

The Aetna/CVS relationship is one more example of the new kinds of partnerships being formed. Even if the merger fails to get approved, the larger trends of healthcare networks moving care closer to the patient is here to stay. Contact SIM Partners to learn how we can help you manage your location-based healthcare patient service needs.

Jon Schepke

Author Jon Schepke

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