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CVS Is Said to Agree to Buy Aetna

nytimes.com

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Re: CVS Is Said to Agree to Buy Aetna

#91

Post by refurb »

afpx wrote: post #83
jrnichols wrote: post #76

Earlier quoted context omitted.

> treated for rashes or flus by nurses I sometimes think that's one of the things that's kept health care so expensive. Nursing salaries aren't cheap. A lot of the home health and basic clinic stuff could be handled by an LPN/LVN or even a Paramedic in many cases. Not everything needs an RN. There are plenty of available telemedicine options to put a provider in touch with a higher level of care if necessary.

Or, the high price may be from administrative costs: http://www.nejm.org/doi/full/10.1056/NEJMp1209711

Do a search for "McKinsey health costs" and browse the report. It breaks down category spending in the US vs. other western countries. Yes, admin cost more in the US, but it doesn't add much to the overall costs. The biggest driver of US healthcare spending are out-patient care. The US just does a shit-ton more of it then most countries.

Re: CVS Is Said to Agree to Buy Aetna

#92

Post by mbesto »

wbl wrote: post #63
dd36 wrote: post #59

Earlier quoted context omitted.

That’s only if MC has huge margins, which is doubtful. They already have to negotiate with every carrier.

Vertical integration cuts costs.

Depends. Kaiser is a great example of this (its a closed loop payer and provider) but it has a huge network within certain regions and doesn't cover nationally. The problem is that CVS via pharmacy retail and MinuteMan only satisfies a part of the whole care provider package. Kaiser on the other hand has it's own providers that carry everything from head to toe (no pun intended). That's why I don't see why this would be such a big deal.

Re: CVS Is Said to Agree to Buy Aetna

#93

Post by refurb »

Consultant32452 wrote: post #86
quadrangle wrote: post #31

Earlier quoted context omitted.

Flu shots are required to be covered in all U.S. insurance per the ACA. The point was that Aetna was requiring the more expensive (for them!) visit to a doctor's office for them to cover it and wouldn't cover it happening at a pharmacy.

The ACA states that your insurance provider must spend 80% of their premiums on health care. The doctor is more expensive, so the health insurance provider is allowed to keep more nominal dollars.

Although true, I doubt that's the reason since stuff like this was common pre-ACA.

The truth is that everything that a payer pays for is done through contracts. Payers will often default to a specific provider because the contract covers it and they don't have a contract for other providers.

In terms of the cost, back-end rebates often bring it down. Also, this particular contract may cost more for a flu shot, but save them even more for other procedures.

Re: CVS Is Said to Agree to Buy Aetna

#94

Post by IBM »

pcurve wrote: post #80
IBM wrote: post #58

Earlier quoted context omitted.

There's excessive concentration at every level of the health care industry. The top 3 PBMs have 80% of the market. Hospitals have consolidated. Doctors practices have consolidated. Consolidation begets consolidation as everyone seeks to increase their leverage over suppliers and customers. If Amazon is going to get into the pharmacy business they'll probably become a distributor as well since it's an outgrowth of the…

"Hospitals have consolidated" Are you sure about this? Hospital and provider networks are probably the most fragmented layer in the healthcare vertical stack, by far. In the For Profit space, I would agree with you, top 3 dominates. But if you throw in non-profit into mix, their power gets really diluted. https://www.compassphs.com/blog/healthcare-trends/healthcare...

I was talking about the for-profit hospitals mainly but non-profit hospitals have been consolidating as well. In Massachusetts, a Partners HealthCare acquisition was blocked on antitrust grounds [1]. If other parts of the value chain are consolidating, everyone feels the need to consolidate.

[1] https://www.bostonglobe.com/business/2015/01/29/partners/s9T...

Re: CVS Is Said to Agree to Buy Aetna

#95

Post by mrfusion »

rdl wrote: post #2

If this turns every CVS into a uniform, inexpensive office/urgent care/etc., particularly with telemedicine, I'll be happy -- the "minute clinic" stuff already provides cheaper and more convenient access to care, but CVS+Aetna+some kind of EHR could do something amazing.

Is there a good way to do telemedicine now? I can’t get over the awkward factor but if it saves money.

Re: CVS Is Said to Agree to Buy Aetna

#96

Post by [deleted] »

untog wrote: post #81
allenz wrote: post #67

I see this as a move towards providing cheap basic medical care. This is timely now that it's possible that the individual mandate will be repealed. Millions of uninsured people could be treated for rashes or flus by nurses at CVS cheaper and faster than at doctor's offices. More competition in healthcare could be a good thing--many say it's bloated and overpriced. The risk is that poor people get basic care while ri…

How does CVS buying Aetna allow for "more competition"? I'm a lot more concerned that before we know it non-Aetna insurance customers will have difficultly or increased cost fulfilling a prescription at CVS stores. I'm not sure what Aetna brings to the table in regard to a future where nurses fill CVSes, either. That seems like it would be a far bigger operation than buying Aetna, and the two would be only tangential…

[deleted]

Re: CVS Is Said to Agree to Buy Aetna

#97

Post by just1nn »

allenz wrote: post #89
untog wrote: post #81

Earlier quoted context omitted.

How does CVS buying Aetna allow for "more competition"? I'm a lot more concerned that before we know it non-Aetna insurance customers will have difficultly or increased cost fulfilling a prescription at CVS stores. I'm not sure what Aetna brings to the table in regard to a future where nurses fill CVSes, either. That seems like it would be a far bigger operation than buying Aetna, and the two would be only tangential…

I agree that CVS wants to stave off Amazon and mail order pharmacies. But a buyout is an expensive way to secure a fraction of the market. Buying Aetna makes it easier to expand the new Minute Clinic business model. CVS no longer has to worry about getting paid less than a hospital for treating a cough or fever. Aetna could even charge zero copay for nurse visits. It's more competition in the "basic healthcare" space…

The "Caremark/CVS" insurance that I have for prescriptions allows me to go to Target/CVS for covered medications, but I also have the option to mail-order (from them, of course). I also have Aetna Health Insurance just by chance (we have a choice of 3 companies @work).

Amazon is going to buy drugs in major bulk (Walmart, or Mail-order-pharmacy style), and likely will charge low "dispensing fees" (because robots will do most thigs). CVS is looking to be the "other other Walmart" of pharmacies. I have worked (as an intern) in many pharmacies, and I've seen several buyouts. At this point in time, I'm very happy that I made the leap from PharmD to SRE/DevOps about 11 years ago. Pharmacists will be robots in <5 years IMHO.

Re: CVS Is Said to Agree to Buy Aetna

#98

Post by ericd »

refurb wrote: post #91
afpx wrote: post #83

Earlier quoted context omitted.

Or, the high price may be from administrative costs: http://www.nejm.org/doi/full/10.1056/NEJMp1209711

Do a search for "McKinsey health costs" and browse the report. It breaks down category spending in the US vs. other western countries. Yes, admin cost more in the US, but it doesn't add much to the overall costs. The biggest driver of US healthcare spending are out-patient care. The US just does a shit-ton more of it then most countries.

I've seen at least one healthcare economist claim that admin costs account for roughly 25% of spending. Is this in line with what you see there?

Re: CVS Is Said to Agree to Buy Aetna

#100

Post by jonas21 »

chimeracoder wrote: post #90
sithadmin wrote: post #74

Earlier quoted context omitted.

>Don't they make a decent percentage of their revenue off of brands which are currently price protected via these tariffs? Yes. If consumers and/or pharmacies in the US could easily and reliably source cheaper brand-name drugs from international markets where price ceilings are in effect, it would ruin many drug companies, especially smaller ones.

> Yes. If consumers and/or pharmacies in the US could easily and reliably source cheaper brand-name drugs from international markets where price ceilings are in effect, it would ruin many drug companies, especially smaller ones. Those price ceilings only exist because of the artificial trade barrier between the US and those other countries. Without that trade barrier, pharmaceutical companies would charge roughly equ…

The companies would be fine, but it would probably severely limit the availability of life-saving drugs in poorer countries. One can argue that on the whole, that's a worse outcome.
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