CVS may be a leader in health-care transformation


Adapted from Robert Whitcomb’s “Digital Diary,’’ in

Woonsocket-based CVS’s purchase of Aetna, the huge insurance company, could at least start to make fragmented and exorbitantly expensive U.S. health care a bit more coherent as well as cutting costs for consumers, both in medical-visit bills and insurance premiums. (We’ll see if that happens in our profit-obsessed system.)

Of course, other pharmacy chains and insurers will also tie the knot.

By putting together the insurance function and the direct provision of care, the merger will help create better, more complete patient medical records, thus facilitating better, especially preventive, care. And by helping to make many CVS drugstores even more of the primary-care/preventive-care centers that they’ve been becoming the past few years, the merger should take the pressure off astronomically expensive hospital emergency rooms, whose overuse is one reason that America’s health-care system is so expensive and inefficient.

Much of the treatment in CVS’s Minute Clinics is provided by nurse practitioners and physician assistants, who are less expensive than U.S. physicians -- the world’s highest paid. The American Medical Association has opposed the merger in part because it fears that the competition will cut doctors’ pay.

Importantly, the merger will strengthen CVS in negotiating with drug makers, which, protected by massive lobbying operations in Washington, charge by far the highest prices in the world – indeed sometimes engage in price-gouging. Those prices are yet another reason why health-care costs threaten to bankrupt the country.

(Happily, Trump signed two bipartisan bills into law last week to ban so-called gag clauses at the pharmacy counter. The bills, the Patient Right to Know Act and the Know the Lowest Price Act, would let pharmacists tell patients that they could save money by paying cash for drugs or try a lower-cost alternative. The existence of gag clauses was an outrage.)

We won’t know for several years what the full effects of the CVS-Aetna merger will be but it’s obvious that this experiment could profoundly affect many millions of Americans.

Will consumers benefit, as well as CVS senior executives and other shareholders?

Health-care hurricane


From Robert Whitcomb's "Digital Diary,'' in

As insurers, drugstore chains, such as Rhode Island-based CVS, with its Minute Clinics, and the likes of Walmart team up to provide direct health care, independent physician groups face growing pressure. Many doctors have decided to throw in the towel and become hospital employees. Meanwhile, many physician groups (including the one I use) are extending their hours and making other changes to be more convenient for harried patients in order to better compete with the retail clinics.

The clinics are a response to America’s astronomically expensive, fragmented and inefficient health-care system. They offer a range of services for injuries and illnesses that can often be treated by a nurse, nurse practitioner or physician’s assistant at a cost considerably less than a physician would charge and much, much less than a hospital emergency room.

But will your local Minute Clinic get to know you, especially if you have a chronic illness, as well as  your primary-care doctor, so as to be in a position to adjust your care over time? And what sort of relationships will develop between local physicians and retail clinics, considering that they’ll often be competitors? The retail health-care revolution is just getting going. The old model of American health care is falling apart; it’s economically unsustainable.

Aetna CEO touts return to community-based healthcare


Via Cambridge Management Group (

FierceHealthcare reports that Aetna CEO Mark Bertolini “is pushing for a return to community-based healthcare even as the insurance company prepares to merge with retail pharmacy giant CVS.''

“Critics of the merger have said the deal will hurt competition and cut local services. But Bertolini said the $69 billion deal with CVS doesn’t change the fact that the healthcare industry is moving toward a renaissance of community-based care,” the news service reported.

“Everything is going back to community,” Bertolini said at a conference in California. “I think the best way to manage the kind of shift we’re in is to go back to community and build smaller and smaller governance models to help support the growth of this. What you’re in essence building is a marketplace in the community around health.” Aetna is based in Hartford and CVS in Woonsocket, R.I.

To read more, please hit this link.

Calif. to probe Aetna's coverage denials.

The Aetna headquarters building, in Hartford, designed by renowned architect  James Gamble Rogers , is the world's largest Colonial Revival Building. It was finished in 1931.    

The Aetna headquarters building, in Hartford, designed by renowned architect James Gamble Rogers, is the world's largest Colonial Revival Building. It was finished in 1931.



For Kaiser Health News

Both of California’s health insurance regulators said they will investigate how Aetna Inc. makes coverage decisions, as the lawsuit of a California man who is suing the nation’s third-largest insurer for improper denial of care heads for opening arguments on Wednesday. Woonsocket, R.I.-based CVS Health, the pharmacy giant, seeks to buy Aetna.

The Department of Managed Health Care, which regulates the vast majority of health plans in California, said Monday it will investigate Hartford, Conn.-based Aetna after CNN first reported Sunday that one of the company’s medical directors had testified in a deposition related to the lawsuit that he did not examine patients’ records before deciding whether to deny or approve care. Rather, he relied on information provided by nurses who reviewed the records — and that was how he was trained by the company, he said.

Insurance Commissioner Dave Jones had already told CNN his office would investigate Aetna, which he reconfirmed in a statement Monday.

“If a health insurer is making decisions to deny coverage without a physician ever reviewing medical records, that is a significant concern and could be a violation of the law,” Jones said.

It is unclear how widespread the review of patient claims by non-physicians is in the industry or whether other insurers will feel compelled to revisit their practices.

The California Department of Insurance, which Jones heads, regulates only a small fraction of the state’s health plans, but they include several Aetna policies. He has previously criticized Aetna for “excessive” health insurance rate hikes, though neither his agency nor the managed health care department has the power to stop the increases.

Jones’ investigation of Aetna will review denials of coverage or pre-authorizations during the tenure of the medical director who testified in the California lawsuit, Jay Ken Iinuma, who has since left the company. Insurance department investigators will also look into Aetna’s procedures for managing medical coverage decisions generally.

The dual investigations come as federal regulators are examining a planned $69 billion purchase of Aetna by pharmaceutical giant CVS — a deal that many experts believe could transform the health care industry.

It’s unclear how the investigations might affect Aetna’s future coverage decisions, or those of other insurers, said Shana Alex Charles, an insurance industry expert and assistant professor at California State University-Fullerton. But she praised the decision to investigate as exactly what insurance regulators should be doing. “Without that strict oversight, corners get cut,” Charles said.

Scott Glovsky, the lawyer representing the California plaintiff, Gillen Washington, said he and his client were “very pleased” by the news that Aetna will be investigated. Speaking Monday, before the managed care department said it would also investigate, Glovsky said his client brought the case “to stop these illegal practices, and we’re looking forward to the insurance commissioner’s investigation so we can make things safer for Aetna patients.”

Washington, of Huntington Beach, had been receiving expensive medication for years to treat a rare immune system disorder known as Common Variable Immune Deficiency.

But in 2014, Aetna denied the college student’s monthly dose of immunoglobulin replacement therapy, saying his bloodwork was outdated. During the appeal process, Washington developed pneumonia and was hospitalized for a collapsed lung.

In recent years, as California Healthline reported last June, patients with similar diseases have faced increasing difficulty getting their insurers to approve treatments, according to clinicians and patient advocates.

In an e-mailed statement on Monday, Aetna did not directly address the question of case reviews by non-physicians. It said its “medical directors review all necessary available medical information for cases that they are asked to evaluate. That is how they are trained, as physicians and as Aetna employees.” It added, “adherence to those guidelines, which are based on health outcomes and not financial considerations, is an integral part of their yearly review process.”

Aetna also noted that it has paid for all of Washington’s treatments since 2014 and continues to do so.

Aetna said in previous documents filed in the lawsuit that it is standard for people with Washington’s immunodeficiency disease to get regular blood tests and that Washington had failed to do so. But Washington’s attorney said his client clearly needed the medication and that Aetna’s action violated its contract with Washington.

Charles, the professor, said she was most surprised by the fact that Iinuma had admitted not only that he hadn’t reviewed Washington’s medical records personally, but that he had no experience treating his disease. The burden should be on insurers to demonstrate why treatment should be stopped, not on doctors and patients to show why it should be continued, Charles said.

“It’s easy to see the cases as just files and not people standing in front of you,” she said.



CVS-Aetna merger: Who would benefit besides top execs and other shareholders?


From Robert Whitcomb's "Digital Diary,'' in

Besides senior executives and other Aetna shareholders, who would benefit most from CVS’s $69 billion acquisition of Aetna?

Well, the  new behemoth’s pharmacy benefit management operation might use its even greater bargaining power with drug makers to negotiate down the extreme, indeed extortive, cost of so  many prescription drugs in such a way as to benefit consumers. But I doubt it. It’s  more likely that they’ll keep the savings to benefit CVS-Aetna senior executives and other shareholders and consumers will see little if any benefit from that.

Indeed, if the merger drives competitors out of business, CVS might, in the fullness of time and pricing power, increase other prices for its captive customer base a lot. But with giant insurer UnitedHealth Group also getting into the big-time clinic business, too, maybe that might not happen.

Anyway, much good can come from this combination.

The merger is part of CVS’s plan to turn itself into a much-wider-service health-care provider, building on its rapidly expanding chain of Minute Clinics. There, nurse practitioners, physician assistants and regular nurses are joining with pharmacists to offer many services that you’d once have to go to a doctor’s office or hospital to get, at very high cost.  After all, U.S. physicians are highest paid in the world, co-payments are jumping, etc. A brief visit to a hospital emergency room shows that far too many patients go to that very expensive venue for problems that could better be addressed in a, well, Minute Clinic. The aging of the population, and thus a flood of sicker people, especially raises the potential of Minute Clinic-like health-care retailers to slow surging health-care costs, or some of them anyway.

Indeed, whatever happens with drug prices at the likes of CVS-Aetna, consumers can save time, and thus money, by using a facility that will offer many primary-care services beyond pills, such as  medical tests, physical exams and medical consultations, as well as food and other products. Life can be frantic. One-stop shopping is very attractive. At the least, these centers might help you cut down on transportation costs.

Getting your health insurance from the same organization where you get much of your health care may also make your life easier.  For one thing, the sharing of patient data between the insurance side and the provider (CVS) may facilitate better care, especially for those with such chronic ailments as heart disease. But, yes, it will also make your personal data more vulnerable to computer hacking from crooks domestic or foreign (especially the Russians and Chinese)….

But again, much depends on whether the merger ends up squashing CVS-Atena competitors so much that the behemoth can jack up prices, including for insurance. Many patients may find themselves trapped in expensive “health-care hubs.’’ Always remember that most companies care far more about their senior executives and other shareholders than anyone else.

And the CVS-Aetna deal is more bad news for hospitals and physician groups: The new entity will probably drain away many of their patients.

Unless executives of the new outfit decide they really want the glamour of a big city headquarters and move it to, say, New York or Boston (remember Fleet Financial Group leaving Providence for Boston?), the merger is good news for Rhode Island, both psychologically (having such an even bigger company based here) and in the new employees that CVS-Aetna would presumably need to hire here for additional administrative, marketing and other headquarters-related work.

But don’t bet the farm on CVS keeping its headquarters in Woonsocket. Increasingly, those working at corporate headquarters, especially younger up-and-coming employees,  and the executive suite, like to be in a dynamic city instead of some suburban-style office park.

So Providence’s Financial District, once an important banking center, might eventually host CVS-Aetna headquarters. Given that Aetna is a financial company that would be fitting. And the Rhode Island School of Design’s  army of graphic and other designers would be next door;  a few blocks away would be the Brown Medical School. Both very handy for a consumer health-care chain. There’s been chatter lately that toy-and-entertainment giant Hasbro might consider moving its headquarters to downtown Providence. Wouldn't it be nice if this old city once again became a major corporate headquarters town?


Llewellyn King: Be scared of whom you kiss, and other big changes in 2017

"The Mistletoe Seller,'' by  Adrien Barrère

"The Mistletoe Seller,'' by Adrien Barrère

Some years are indelibly etched into history, like 1941, with the bombing of Pearl Harbor; 1964, with the Civil Rights Act; and 1968, with the anti-war demonstrations.

Such a year may be 2017, not only because of Donald Trump’s presidency but also because of revolutionary changes in the way we live and work that aren’t directly produced or ratified by politics.

Here are some of the takeaways:

The uprising of women against men in power who have harassed them, assaulted them and sometimes raped them. Nothing quite like this has happened since women got the vote. The victims have already wrought massive changes in cinema, journalism and Congress: Great men have fallen, and fallen hard. Can the titans of Wall Street and the ogres of the C-Suite be far behind?

This Christmas, more people will buy online than ever before. Delivery systems will be stretched, from the U.S. Postal Service to FedEx, which is why Amazon and others are looking at new ways of getting stuff to you. There will be bottlenecks: Goods don’t come by wire, yet. The old way is not geared for the new.

The sedan car — the basic automobile that has been with us since an engine was bolted in a carriage — is in retreat. Incredibly, the great top-end manufacturers, from Porsche to Rolls Royce and even Lamborghini, are offering SUVs. They win for rugged feel, headroom and, with all-wheel drive, they’ll plow through snow and mud. In the West, luxury pickups are claiming more drivers every year for the same reasons.

No longer are electric vehicles going to be for the gung-ho few environmentalists. Even as the big automakers are gearing up for more SUV production, they’re tooling up for electrification on a grand scale, although the pace of that is uncertain. Stung by the success of Tesla, the all-electric play, General Motors is hoping to get out in front: It is building on its all-electric Volt. Volvo is going all-electric and others want to hedge the SUV bet. The impediments: the speed of battery development and new user-friendly charging.

The money we have known may not be the money we are going to know going forward. In currency circles, there is revolution going on about a technology called “blockchain.” Its advocates, like Perianne Boring, founder and president of the Chamber of Digital Commerce, believe it will usher in a new kind of currency that is safe and transparent. A few are making fortunes out of bitcoin, which has risen 1,000 percent in value this year so far. A fistful of new currencies are offered — and even bankrupt Venezuela is trying to change its luck with cryptocurrency. For those in the know, blockchain is the new gold. Will it glitter?

The proposed merger between CVS, a drugstore chain, and Aetna, an insurance giant, may be one of the few mergers that might really benefit the consumer as well as the stockholders and managers. It will lower drug prices because both the drug retailer and the paymaster will be at the same counter. Expect this new kind of health provider to drive hospital charges toward standardization.

This holiday season, consider the changes in the way you live now. Watch out for whom and how you kiss under the mistletoe, and for how Internet purchases get to you. If a new car is in store for you in 2018, a difficult choice may be to venture electric, go SUV or stay with a sleek sedan. And will you pay for it with the old currency or the new-fangled cryptocurrency?

Happy holidays!

On Twitter: @llewellynking2
Llewellyn King (llewellynking1) is executive producer and host of
White House Chronicle,  on PBS.

The  Tesla Model 3  first deliveries event took place on July 28, 2017.

The Tesla Model 3 first deliveries event took place on July 28, 2017.



Robert Whitcomb: In the Amazon jungle


Amazon is an impressive if rather creepy company, with its style set by its cold, “data-driven’’ founder/CEO, Jeff Bezos. An Aug. 15 New York Times piece, “Inside Amazon,’’ laid out the travails of the monopolistic and Darwinian enterprise’s white-collar workforce. Their issues have gotten more attention than the much worse Dickensian conditions of the blue-collar employees in its warehouses and the company’s relentless accumulation, like the also Orwellian Google’s, of our personal information. Amazonianism’s causes?

One is in the mirror. Americans have grown addicted to buying stuff online -- of course, the cheaper the better. They seem to want to avoid face-to-face interactions in stores -- and community engagement in general -- and Amazon’s power ensures that they’ll get low prices, at least for now (see below), even as their local stores close because of such online competition.

The preference for communicating via screens rather than person-to-person is especially common among the young, who grew up in the Internet Age. Human-resource managers have told me that young job applicants often don’t look them in the eye because in-person encounters make them anxious.

The disappearance of many well-paying jobs, and static (or worse) compensation except for top executives and investors, have encouraged consumers to seek out cheaper stuff than a few decades ago. But – irony of ironies! – Amazon and other high-tech automators have helped destroy good U.S. jobs in their “data-driven’’ mania to take full advantage of the international low-wage, cheap-goods machine.

Physical-store chains such as CVS and Home Depot are doing their bit to kill jobs --- by, for instance, installing automatic checkouts. I try to boycott stores with these machines because I know that each means the loss of another entry-level or second job for someone who needs it. This makes me feel better for a few minutes.

If Amazon’s workplace brutalities offend some consumers, they could resume shopping in their own communities and thus help employ some of their neighbors. Most won’t.

And look to Washington, where ideology and campaign contributions ensure that the Justice Department’s Antitrust Division doesn’t go after such monopolies as Amazon and Google. Until about 1980, Republican and Democratic administrations actually enforced laws against monopoly. The long disinclination to do so will hit consumers hard when Amazon, which has been undercutting other retailers to gain maximum market share, killing many brick-and-mortar competitors, suddenly jacks up prices big time.

Also consider the collapse of the private-sector union movement. If there were unions at Amazon, the Third World work environment would quickly go away. Gilded Age working conditions helped spawn the union movement in the first place. Now, management’s utter dominance has employees ready to put up with anything to keep their jobs.

Meanwhile, the “Big Data’’ revolution is turning workers into organic robots, soon to be replaced by real, inorganic robots. When every move of workers is measured for maximum productivity and profit potential, as at Amazon, kindly treatment of employees pretty much disappears. Employees are mere data points.

This process started with assembly-line and other blue-collar workers. The generally affluent types who read, say, The New York Times didn’t care that much. But turning employees into metrics is now heading rapidly up the food chain. Physicians, lawyers, tech engineers, middle managers and journalists (monitored for the number of Internet clicks their work gets) are being measured daily by senior executives who see their employees as entirely fungible and disposable.

And don’t expect the executive suite to share the riches from this speed-up with lower-level employees. The tendency for more and more of the wealth of companies to be shared by fewer and fewer people continues apace. We’re on a selfishness wave.

Amazon has created a fascinating machine for distributing goods. (Its delivery drones are next -- maybe equipped with surveillance gear?) Mike Daisey, writing in The Guardian (“Amazon’s brutal work culture will stay: bottom lines matter more than people,’’ Aug. 22), quoted comedian Louis C.K. as saying about such enterprises that “everything’s amazing and nobody’s happy’’ . Well, some are.

Anyway, most Americans seem to adore Amazon, which will repay them good and hard.


Lovely dim late-summer light today, and  leaves are falling off the plane trees from sheer exhaustion.

Robert Whitcomb ( is a  Providence-based editor and writer, a partner at Cambridge Management Group ( and a Fellow of the Pell Center, in Newport, He used to be the editorial-page editor of The Providence Journal, the finance editor of the International Herald Tribune and an editor at The Wall Street Journal, among other jobs.


Of class and charity



Philanthropic contributions by very rich people get a lot of attention. An example around here is Thomas Ryan, a former head of CVS who recently gave $15 million to the University of Rhode Island for a brain-science center to be named after his parents.

Besides the satisfactions of giving per se and the plaudits of the general public, gifts are sometimes meant to show other rich people how successful the givers are. This explains why so much new money rushes into already very rich “nonprofit” institutions, such as Ivy League colleges and big art museums. Wouldn’t giving a pile to, say, a community college serving poor people do more for society than adding yet more to Harvard’s $31 billion endowment?

And this is not the age of the anonymous contribution. Of course, nonprofits, besides appealing to altruism and ego, know that publicizing the names of the donors may encourage an arms race of giving by other rich people.

Anyway, URI alumnus Ryan commendably gave to a local and grossly underfunded public institution. A few years back, the arena at URI was named after him as a result of gifts by him and CVS. In his last 14 months as CEO, he made $124 million, reported Dow Jones. Of course, if the very rich paid a tad more in taxes, then public institutions could more often build such public facilities out of public money and not always be selling “naming opportunities.”

Large public companies’ senior execs have rarely been romantic altruists. But there’s no doubt that they have adjusted their missions, and sense of civic duty, in the past 30 or so years via tax and other legal changes engineered by their lobbyists.

Most of these companies used to consider themselves as having a fairly wide range of stakeholders — not just senior executives and other big shareholders but nonexecutive employees and the communities within which the companies operated. The idea was that the long-term success of the companies would depend on addressing the welfare of all constituencies.

Now the aim above all is to maximize and speed compensation for senior execs, on which, because of lobbyists’ success in creating tax dodges, many pay remarkably little tax, considering their wealth. Investment gains via stock options, etc., are much tax-favored over wages. (The quickest way to maximize their personal profits is to lay off and/or cut the compensation of lower-level employees.) This explains in part, along with globalization, computerization, automation and the loss of local ownership in many places — laying off your neighbors is tough — explains some of the woes of the middle class the past 30 years or so.

Then there’s American feudalism. The Walton family has a fortune of about $100 billion. They have so much money, in part, because their company pays their employees so little. Some Walmart stores have food drives for impoverished Walmart employees.

The holders of current and future dynastic wealth arrange through tricky trusts (including the creative use of charities) and other perfectly legal mechanisms to pay remarkably little or no estate or gift taxes and thus help ensure the self-perpetuation of power and wealth for their heirs. Readers should read about the wonders of “donor-advised funds” for charities — also a cash cow for financial firms because of the fees — and “charitable lead annuity trusts,” used to boost dynastic wealth by avoiding taxes.

The usual structure for these things is the "foundation,'' which can sometimes be more of  creature for perpetuating private dynastic wealth and power than a device for good works.

Some more reasons that the government is broke.

Among other benefits, this dynastic wealth gives favored families access to the fanciest schools with the best-connected faculty and students, which, in turn, reinforces the vast advantage that the lucky heirs already have. Thus there’s less social mobility in America than in most of its developed world competitors.

The public might want to at least consider whether society would be better off if the very rich shared a tad more of their wealth further upstream rather than through the charities they create to do good works, glorify their names and/or avoid paying taxes that pay for public services such as URI.


A good thing about this sometimes gray, sometimes golden time of the year is that you don’t have to weed for a while and it cleans out the mosquitoes. No wonder farmers tend to like November and December. They get a rest. Too bad the holidays have to ruin it.


Everyone understandably bemoans Rhode Island’s jobless rate of 9.2 percent. But bear in mind that the state’s tininess and industrial history skew those numbers. If you spun off eastern Connecticut, parts of Berkshire County, Mass., or upstate New York into separate states, they’d have similar rates. Still, Rhode Island should have done a lot more to capitalize on its location, ports and fabulous design community.

Robert Whitcomb (;; is a former editor of The Providence Journal's Commentary pages, where this column started, and a Providence-based editor and writer.