Published: Thu, December 07, 2017
Money | By Armando Alvarado

Aetna, CVS merger sparks talk of Humana eyeing deal with Walmart

Aetna, CVS merger sparks talk of Humana eyeing deal with Walmart

"It's the overall outcome for the patient", Aetna CEO Mark Bertolini told Reuters in an interview.

That's the goal, according to a statement by CEO Larry Merlo on his company's deal for Aetna. The merged company will also be better able to offer employers one stop for their health insurance.

Americans could benefit from the planned merger of the health insurance provider Aetna and CVS, but some health care analysts caution that one unintended outcome could be a race toward greater consolidation in the industry, which could have as-yet-unknown impacts on access and cost of care. "They're expanding the retail clinics so they won't be quite urgent care, but they'll resemble a direct primary care facility". "Walgreens is likely to consider its own strategy to respond to the CVS deal and could involve purchase of a managed-care company such as [Humana] or [WellCare] or a PBM such as [Express Scripts]", she said.

"We're in an environment where health care in general is undergoing a massive amount of transformation ... and you've got nontraditional players like Amazon looking at the health care space", said Jim Winkler, a senior vice president in Aon's health practice. The mammoth acquisition pairs a company that runs more than 9,700 drugstores and 1,100 walk-in clinics with an insurer covering around 22 million people.

Patients also may find the CVS-Aetna combination much more involved in managing their care, especially for those with expensive chronic conditions like diabetes. Aetna is the nation's No. 3 health insurer, competing against UnitedHealth Group Inc UNH.N , Anthem and Cigna to provide coverage for doctor and hospital visits.

The companies are counting on the notion that people will prefer going to a clinic around the corner over making repeated trips to their doctors that might require appointments and waits. But he said would be reluctant to get medical services there.

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The CVS-Aetna combination is enormous, but it's also the continuation of a trend toward insurance companies and health care providers getting together to offer integrated service, said Walid Gellad, a doctor and professor of health policy and management at the University of Pittsburgh.

Still, it would pale in comparison to the priciest deal ever completed in the US: America Online Inc.'s purchase of Time Warner, which was valued at $181.6 billion and completed in 2001.

It's also not certain if this will mainly be good for the 90 million customers of CVS and Caremark as well as the 23 million people who have Aetna insurance or if people with other insurance and pharmacy plans can also benefit.

Watch shares of CVS trade in real time here.

The deal still needs approval from antitrust regulators who have been skeptical of similar health care mergers. "Our combined company will be more competitive in the marketplace and accelerate progress toward achieving this mission", Bertolini said. The bulked-up company also may gain more negotiating leverage over prescription drug prices, but it's far too early to say how much or whether that benefit will trickle down to customers.

A CVS Pharmacy Store in the city of Fort Worth.

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