Feature

Experts discuss potential benefits, disadvantages to Cigna-Express Scripts, CVS-Aetna mergers

The Department of Justice approved the Cigna-Express Scripts merger on Sept. 17, according to Business Insider and The Wall Street Journal reported that the CVS-Aetna merger would likely get the green light by the end of the month.

When each proposed merger was announced, the potential benefits of bringing health benefits and pharmaceutical retailing under the same roof were touted, with the companies claiming they would be able to reduce costs, improve health care experiences, and simplify processes.

However, the Department of Justice decisions set into motion many concerns regarding the future of health care, medical and consumer experts told Healio Family Medicine. Many of these experts — most interviewed before the recent Department of Justice actions — said the future of health care looks daunting, not brightening.

Likely disadvantages

Alan Dow
Alan Dow

 

“I have mixed feeling on these mergers,” Alan Dow, MD, MSHA, Healio Family Medicine editorial board member and general internist at Virginia Commonwealth University said. “On one hand, a more integrated health care system could streamline care, making clinicians’ lives easier and decreasing errors and unnecessary paperwork. But on the other hand, most mergers have just led to higher prices and less choices for patients and have put a heavier hand on clinicians by putting more barriers in the way of the best care.”

Stefan Kertesz
Stefan Kertesz

 

Stefan Kertesz, MD, MSc, a primary care physician and professor of the preventive medicine at the University of Alabama at Birmingham, cited another industry’s track record to justify his fear that prices will go up rather than down.

“We have a health care system that is already terrible at containing prices and it is more likely these mergers will make that situation worse, not better,” he said. “CVS and Aetna are using the argument that cutting out the middle man will lower prices and is a great idea. A similar argument was made when the cable and media industries starting merging. Tell me, is your cable bill any lower than it was 20 years ago?”

AMA has also expressed concerns about the CVS-Aetna proposal, specifically that it will increase premiums in the vast majority of Medicare Part D regional markets, increase drug spending and out-of-pocket costs, and decrease competition in health insurance markets and thus, raise premiums and reduce quality of insurance. AMA also had concerns about the Cigna-Express merger, saying it “magnifies competition issues.”

The concerns that Dow, Kertesz and AMA make, particularly about pricing, are valid, Z. John Lu, PhD, an assistant professor of economics at California State University Channel Islands and Sherry Glied, PhD, dean of the Robert F. Wagner Graduate School of Public Service at New York University told Healio Family Medicine.

“These consolidations, if approved, will lead to a few very large companies, making it more difficult for not only current competition, but also future competition by making it more costly to enter this line of business. These consolidated firms will also likely have far greater political influence, further enhancing their market power when it comes to setting prices,” Lu said.

“There will be higher amounts charged for insurance products and medical supplies because less competition is something that usually causes such prices to go up,” added Glied.

Mergers and Acquisitions
The Department of Justice decision to approve the Cigna-Express Scripts merger set into motion many concerns regarding the future of health care, consumer and medical experts told Healio Family Medicine.
Photo Source: Adobe

 

Though CVS and Aetna had said the merger provides an “opportunity to better fight chronic disease,” Glied stated she was not convinced patients’ health would dramatically improve as a result of the consolidations.

“If you’re really optimistic, having more information about patients could somehow lead to improvements in their care but that’s likely more of a hope than something we will truly see happen,” she said.

Barbara Zabawa
Barbara Zabawa

 

When a few large companies take up more market share, they have even more leverage in favoring their interests over those of the patients and providers, said Barbara Zabawa, JD, MPH, a clinical assistant professor in health informatics and administration department at the University of Wisconsin, Milwaukee.

“Because of the new, combined companies’ sizes, patients will be limited in the types of providers they can see or treatments that will be covered by their insurance,” she explained. “CVS and Aetna [and Express Scripts and Cigna], will likely be able to be more effective at lobbying against reforms that might help patients get access to more affordable care or to initiatives that may improve population health that exist outside the health care arena,” Zabawa continued.

She and Lu agreed that the proliferation of retail clinics that often results from such mergers could hurt the primary care physicians not directly affiliated with them.

“Because retail clinics usually do not employ physicians, independent physician clinics that deliver primary care may be hit especially hard from such a requirement. With the integration of retail clinics, traditional primary care clinics may lose business to those retail clinics if Aetna requires its enrollees to see a retail clinic as a first step in the clinical process,” Zabawa said.

Z. John Lu
Z. John Lu
 

“The primary care physician would likely see a neutral to negative impact from the consolidation, due to these retail clinics (such as CVS’ MinuteClinic) taking away their patients by offering a one-stop shop for medication refills and non-emergency, non-chronic care needs like immunizations and physicals provided by non PCPs such as nurse practitioners and physician assistants, often times without any out-of-pocket costs and with more convenient hours,” Lu said.

“Patients with chronic diseases need cardiologists, oncologists, and other specialists which are not employed by retail clinics, so I don’t see the merger impacting them yet,” he added.

“The primary care physician would likely see a neutral to negative impact from the consolidation, due to these retail clinics taking away their patients by offering a one-stop shop for medication refills and non-emergency, non-chronic care needs like immunizations and physicals provided by non PCPs, often times without any out-of-pocket costs and with more convenient hours,” Lu said.

“Patients with chronic diseases need cardiologists, oncologists, and other specialists are not employed by retail clinics, so I don’t see the merger impacting them yet,” he added.

According to Kertesz, the mergers could potentially further erode the already weak relationship between primary care physicians, large insurance companies and pharmaceutical benefit managers.

“Physicians are already being bullied by these corporate behemoths, and the bigger the corporate enterprises get, the less power primary care physicians have in their relationships with them,” he explained.

Experts advise caution

Michael Munger
Michael Munger
 

The increasing amount of work expected of primary care physicians lends itself to a possible benefit of such mergers, but with one big caveat, according to Michael Munger, MD, and president, American Academy of Family Physicians.

“When mergers like this happen and retail clinics are established, fragmentation and duplication of care often result. To avoid those unintended consequences, good communication and collaboration with a patient’s family physician and other primary care physicians is a must,” he said.

"Some patients may know the difference between the flu and pneumonia vaccines, but most do not. Some may understand exactly what the retail clinic professional meant when he or she rattled off their HbA1c test results, but most do not,” Munger continued. “If the retail clinic does not provide such information to a patient’s primary care physician, the burden of that PCP is increased by reaching out to get the information, or if we repeat an exam that does not need to be repeated, we are increasing cost,” he explained.

When pressed, most of the experts who spoke to Healio Family Medicine acknowledged some potentially positive outcomes from the mergers for patients and providers, though they stressed they were more certain of the risks than the benefits.

“If pharmacy benefit management companies are making lots of money by overcharging the insurer and not paying a lot of money to pharmacists to sell their drugs, it is possible, when CVS and Aetna all start pulling from one wallet, the consumer and PCP will financially benefit. But there is so much we don’t know,” Kertesz noted.

Glied and Dow noted that merged companies have access to more efficient information technology resources and hence, could potentially use electronic health records in a way that yields a positive benefit to the medical profession.

Sherry Glied
Sherry Glied

“The combined companies could extract higher benefits and better coding which is always a goal of the health care industry,” Glied said.

“We might see information systems become aligned which will lead to better coordination of care and better tracking of patient data and outcomes,” Dow said.

He suggested that insurance and pharmaceutical corporations that remain after mergers should put their focus on the well-being of their patients.

“Companies might have to get serious about trying to help people live healthier lives. When you are the only company left, your only way forward is to keeping people healthy,” Dow said.

Potential next steps for PCPs

Munger told Healio Family Medicine more mergers like the CVS-Aetna and Express Scripts-Cigna ones are likely on the horizon and thus, explained the most important thing family physicians need to know right now.

“Make sure you understand who the players are in your medical neighborhood, and make sure you have a good relationship with them. If you don’t, find out who they are and get those relationships established because that is going to be really, really key to curbing costs and reducing burdens moving forward,” he added.

Handshake by Corporate Execs
When pressed, most of the experts who spoke to Healio Family Medicine acknowledged some potentially positive outcomes from the mergers for patients and providers, though they stressed they were more certain of the risks than the benefits.
Photo Source: Adobe

 

Lu offered a suggestion that might help primary care physicians and family medicine doctors keep as their patients as “a wave of mergers” potentially threatens to take some of their patients away.

“Prior studies by health care experts have shown that most of these mergers either have not improved quality of care, or often have actually negatively affected it. Most patients prefer to see a doctor who has known them for a long time. So you must show your patients that you provide a superior quality of care, whether it be by lowering the cost or seeing your patients as much as possible rather than delegating the responsibilities to someone else in your practice,” he said.

“This can make the difference between your patient going to a retail clinic, and your keeping that patient for 15-years, 20-years, or even a lifetime,” Lu added. – by Janel Miller

Disclosures: Dow reports no relevant financial disclosures. Munger is president of AAFP. Healio Family Medicine was unable to determine the other contributors’ relevant financial disclosures prior to publication.

The Department of Justice approved the Cigna-Express Scripts merger on Sept. 17, according to Business Insider and The Wall Street Journal reported that the CVS-Aetna merger would likely get the green light by the end of the month.

When each proposed merger was announced, the potential benefits of bringing health benefits and pharmaceutical retailing under the same roof were touted, with the companies claiming they would be able to reduce costs, improve health care experiences, and simplify processes.

However, the Department of Justice decisions set into motion many concerns regarding the future of health care, medical and consumer experts told Healio Family Medicine. Many of these experts — most interviewed before the recent Department of Justice actions — said the future of health care looks daunting, not brightening.

Likely disadvantages

Alan Dow
Alan Dow

 

“I have mixed feeling on these mergers,” Alan Dow, MD, MSHA, Healio Family Medicine editorial board member and general internist at Virginia Commonwealth University said. “On one hand, a more integrated health care system could streamline care, making clinicians’ lives easier and decreasing errors and unnecessary paperwork. But on the other hand, most mergers have just led to higher prices and less choices for patients and have put a heavier hand on clinicians by putting more barriers in the way of the best care.”

Stefan Kertesz
Stefan Kertesz

 

Stefan Kertesz, MD, MSc, a primary care physician and professor of the preventive medicine at the University of Alabama at Birmingham, cited another industry’s track record to justify his fear that prices will go up rather than down.

“We have a health care system that is already terrible at containing prices and it is more likely these mergers will make that situation worse, not better,” he said. “CVS and Aetna are using the argument that cutting out the middle man will lower prices and is a great idea. A similar argument was made when the cable and media industries starting merging. Tell me, is your cable bill any lower than it was 20 years ago?”

AMA has also expressed concerns about the CVS-Aetna proposal, specifically that it will increase premiums in the vast majority of Medicare Part D regional markets, increase drug spending and out-of-pocket costs, and decrease competition in health insurance markets and thus, raise premiums and reduce quality of insurance. AMA also had concerns about the Cigna-Express merger, saying it “magnifies competition issues.”

The concerns that Dow, Kertesz and AMA make, particularly about pricing, are valid, Z. John Lu, PhD, an assistant professor of economics at California State University Channel Islands and Sherry Glied, PhD, dean of the Robert F. Wagner Graduate School of Public Service at New York University told Healio Family Medicine.

“These consolidations, if approved, will lead to a few very large companies, making it more difficult for not only current competition, but also future competition by making it more costly to enter this line of business. These consolidated firms will also likely have far greater political influence, further enhancing their market power when it comes to setting prices,” Lu said.

“There will be higher amounts charged for insurance products and medical supplies because less competition is something that usually causes such prices to go up,” added Glied.

Mergers and Acquisitions
The Department of Justice decision to approve the Cigna-Express Scripts merger set into motion many concerns regarding the future of health care, consumer and medical experts told Healio Family Medicine.
Photo Source: Adobe

 

Though CVS and Aetna had said the merger provides an “opportunity to better fight chronic disease,” Glied stated she was not convinced patients’ health would dramatically improve as a result of the consolidations.

“If you’re really optimistic, having more information about patients could somehow lead to improvements in their care but that’s likely more of a hope than something we will truly see happen,” she said.

Barbara Zabawa
Barbara Zabawa

 

When a few large companies take up more market share, they have even more leverage in favoring their interests over those of the patients and providers, said Barbara Zabawa, JD, MPH, a clinical assistant professor in health informatics and administration department at the University of Wisconsin, Milwaukee.

“Because of the new, combined companies’ sizes, patients will be limited in the types of providers they can see or treatments that will be covered by their insurance,” she explained. “CVS and Aetna [and Express Scripts and Cigna], will likely be able to be more effective at lobbying against reforms that might help patients get access to more affordable care or to initiatives that may improve population health that exist outside the health care arena,” Zabawa continued.

She and Lu agreed that the proliferation of retail clinics that often results from such mergers could hurt the primary care physicians not directly affiliated with them.

“Because retail clinics usually do not employ physicians, independent physician clinics that deliver primary care may be hit especially hard from such a requirement. With the integration of retail clinics, traditional primary care clinics may lose business to those retail clinics if Aetna requires its enrollees to see a retail clinic as a first step in the clinical process,” Zabawa said.

PAGE BREAK

Z. John Lu
Z. John Lu
 

“The primary care physician would likely see a neutral to negative impact from the consolidation, due to these retail clinics (such as CVS’ MinuteClinic) taking away their patients by offering a one-stop shop for medication refills and non-emergency, non-chronic care needs like immunizations and physicals provided by non PCPs such as nurse practitioners and physician assistants, often times without any out-of-pocket costs and with more convenient hours,” Lu said.

“Patients with chronic diseases need cardiologists, oncologists, and other specialists which are not employed by retail clinics, so I don’t see the merger impacting them yet,” he added.

“The primary care physician would likely see a neutral to negative impact from the consolidation, due to these retail clinics taking away their patients by offering a one-stop shop for medication refills and non-emergency, non-chronic care needs like immunizations and physicals provided by non PCPs, often times without any out-of-pocket costs and with more convenient hours,” Lu said.

“Patients with chronic diseases need cardiologists, oncologists, and other specialists are not employed by retail clinics, so I don’t see the merger impacting them yet,” he added.

According to Kertesz, the mergers could potentially further erode the already weak relationship between primary care physicians, large insurance companies and pharmaceutical benefit managers.

“Physicians are already being bullied by these corporate behemoths, and the bigger the corporate enterprises get, the less power primary care physicians have in their relationships with them,” he explained.

Experts advise caution

Michael Munger
Michael Munger
 

The increasing amount of work expected of primary care physicians lends itself to a possible benefit of such mergers, but with one big caveat, according to Michael Munger, MD, and president, American Academy of Family Physicians.

“When mergers like this happen and retail clinics are established, fragmentation and duplication of care often result. To avoid those unintended consequences, good communication and collaboration with a patient’s family physician and other primary care physicians is a must,” he said.

"Some patients may know the difference between the flu and pneumonia vaccines, but most do not. Some may understand exactly what the retail clinic professional meant when he or she rattled off their HbA1c test results, but most do not,” Munger continued. “If the retail clinic does not provide such information to a patient’s primary care physician, the burden of that PCP is increased by reaching out to get the information, or if we repeat an exam that does not need to be repeated, we are increasing cost,” he explained.

When pressed, most of the experts who spoke to Healio Family Medicine acknowledged some potentially positive outcomes from the mergers for patients and providers, though they stressed they were more certain of the risks than the benefits.

“If pharmacy benefit management companies are making lots of money by overcharging the insurer and not paying a lot of money to pharmacists to sell their drugs, it is possible, when CVS and Aetna all start pulling from one wallet, the consumer and PCP will financially benefit. But there is so much we don’t know,” Kertesz noted.

Glied and Dow noted that merged companies have access to more efficient information technology resources and hence, could potentially use electronic health records in a way that yields a positive benefit to the medical profession.

Sherry Glied
Sherry Glied

“The combined companies could extract higher benefits and better coding which is always a goal of the health care industry,” Glied said.

“We might see information systems become aligned which will lead to better coordination of care and better tracking of patient data and outcomes,” Dow said.

He suggested that insurance and pharmaceutical corporations that remain after mergers should put their focus on the well-being of their patients.

“Companies might have to get serious about trying to help people live healthier lives. When you are the only company left, your only way forward is to keeping people healthy,” Dow said.

Potential next steps for PCPs

Munger told Healio Family Medicine more mergers like the CVS-Aetna and Express Scripts-Cigna ones are likely on the horizon and thus, explained the most important thing family physicians need to know right now.

“Make sure you understand who the players are in your medical neighborhood, and make sure you have a good relationship with them. If you don’t, find out who they are and get those relationships established because that is going to be really, really key to curbing costs and reducing burdens moving forward,” he added.

Handshake by Corporate Execs
When pressed, most of the experts who spoke to Healio Family Medicine acknowledged some potentially positive outcomes from the mergers for patients and providers, though they stressed they were more certain of the risks than the benefits.
Photo Source: Adobe

 

Lu offered a suggestion that might help primary care physicians and family medicine doctors keep as their patients as “a wave of mergers” potentially threatens to take some of their patients away.

“Prior studies by health care experts have shown that most of these mergers either have not improved quality of care, or often have actually negatively affected it. Most patients prefer to see a doctor who has known them for a long time. So you must show your patients that you provide a superior quality of care, whether it be by lowering the cost or seeing your patients as much as possible rather than delegating the responsibilities to someone else in your practice,” he said.

“This can make the difference between your patient going to a retail clinic, and your keeping that patient for 15-years, 20-years, or even a lifetime,” Lu added. – by Janel Miller

Disclosures: Dow reports no relevant financial disclosures. Munger is president of AAFP. Healio Family Medicine was unable to determine the other contributors’ relevant financial disclosures prior to publication.