From Robert Whitcomb's "Digital Diary,'' in GoLocal24.com:
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?