UPDATE: Sept. 1, 2020: Responding to concerns over anticompetitive practices, Jim Boyman, local Aetna Market President, reiterated the purpose of the plan is to use CVS' store footprint to help consumers manage their health more easily.
However, CVS does expect some additional front-store revenue at its retail locations as a result of the plan design, and plans to expand Aetna Connected to other metro markets beyond the pilot in the Kansas City region on a to-be-determined timeline, Boyman said.
David Balto, former policy director of the Federal Trade Commission, noted the novel plan design would likely result in less choice and higher costs for employers and consumers.
Employers should be "extraordinarily careful" before signing up if they want to ensure workers access to a full range of healthcare services, Balto said. "CVS is moving toward a restricted market approach that would only be attractive in the Soviet Union. You have many choices, as long as they’re CVS."
- CVS Health-owned Aetna on Monday rolled out a plan design that would steer patients toward its parent company's brick-and-mortar locations — a key concern of antitrust regulators in reviewing the almost $69 billion megamerger that closed in 2019.
- The Aetna Connected plan gives members access to appointments at CVS' MinuteClinics and its newer wellness-focused HealthHUBs for no copay, along with other CVS services like free at-home prescription delivery and discounts on health-related items.
- The plan is launching for 2021 in the Kansas City insurance market, which includes Clay, Jackson and Platte Counties in Missouri and Johnson and Wynadotte Counties in Kansas. It's targeted to employers with more than 101 employees.
Critics of the megamerger between CVS and Aetna worried the move is where the healthcare behemoth has been heading all along: leveraging Aetna's almost 40 million member base to drive revenue for its stores. CVS bought the payer for $69 billion in 2018, and has been working to integrate the company, while looking for opportunities to cross-sell, since. The deal created a massive healthcare entity, with significant market share in both the insurance and pharmacy industries.
CVS and Aetna spent much of 2018 and 2019 attempting to convince state attorneys general, antitrust regulators and even Congress the merger would drive value for consumers and not result in anticompetitive practices. In one February 2018 hearing before the House Judiciary Regulatory Reform, Commercial and Antitrust Law Subcommittee, lawmakers expressed concerns the combined entity might funnel Aetna beneficiaries solely to CVS pharmacies, harming independent drugstores and other national chains.
CVS has faced allegations of similar behavior in the past, with HIV patients in 2018 accusing its pharmacy benefit management arm, Caremark, of leveraging its market power to make them fill scripts at CVS pharmacies.
The American Medical Association, advocacy group Consumers Union and pharmacy organizations, among other groups, were staunchly opposed to the merger on anticompetitive concerns. But the deal received the final greenlight after a lengthy review by a federal judge in September last year.
CVS has firmly denied such fears would ever come to fruition. However, at investor days and on earnings calls, top brass has touted how the union gives CVS extensive reams of claims data to help it engage with beneficiaries in retail stores, among other uses. The company has already rolled out care management pilots for Aetna members leveraging CVS stores.
CVS has also been leaning into its ongoing retail health strategy, as the Rhode Island-based company continues pivoting to focus on healthcare services. CVS now has more than 200 HealthHUB locations, which devote a fifth of floor space to health products and services, open across 22 states, with the goal of having 1,500 up and running by the end of next year. That's in addition to CVS' almost 10,000 retail locations and more than 1,100 MinuteClinics.
CVS CEO Larry Merlo on an August earnings call noted HealthHUBs continue to drive volume, including a 15% increase in visits associated with chronic conditions over the control group: "an important validation point of our ability to impact medical costs through our consumer-facing assets," he said.
The new Aetna Connected plan also includes a 24/7 CVS pharmacist helpline and access to CVS' specialty pharmacy network, home infusion services and managed pharmacy network, which includes non-CVS drugstores like Walmart and Kroger. Members will also have access to Aetna's network of about 1,250 primary care doctors, 8,300 specialists, 13 hospitals and 32 urgent care facilities in the Kansas City area.
Aetna claims the plan will save members 20% on premiums compared to other PPO plans in the region.