CVS Health CEO lays out plans for Aetna integration at JPM

In In The News by Barbara Jacoby

By: Kevin Truong


CVS Health Larry Merlo announced the first retail health “concept store” focused on chronic disease opening up in the Houston, Texas market next month at the J.P. Morgan Healthcare Conference in San Francisco.

CVS Health and Aetna are already moving forward as an integrated company by rolling out new consumer services shortly after the close of the blockbuster acquisition at the end of last year.

During a presentation at the J.P. Morgan Healthcare Conference in San Francisco, CVS Health CEO Larry Merlo laid out his high-level strategy to improve consumer healthcare and assuaged some concerns over the last minute stumbling block to the deal posed by Judge Richard Leon.

“I want to unequivocally state CVS Health and Aetna are one company and our transformation work is already underway,” Merlo said. “We’re already rolling out products and services that benefit clients by helping their members achieve their best health at a lower cost.”

He added that the additional court review will not impact the timeline for integration and roll-out of consumer health services. Part of that integration includes pharmacy dispensing at Aetna being consolidated within the CVS Caremark PBM.

He said that savings made through the integration of corporate functions will start to emerge in Q1 of 2019, procurement and formulary alignment benefits will start to accrue in the first half of 2019 and medical cost reductions will start to become apparent on the balance sheet near the end of 2019.

Merlo underscored the use of CVS Health’s consumer facing resources as a pathway to open a “new front door to healthcare” through the company’s wide ranging retail presence and already frequent touchpoints with patients.

“We don’t have to build new routines, we simply have to build our programs and services into the existing routines that already exist,” Merlo said.

Merlo announced the first retail health “concept store” focused on chronic disease opening up in the Houston, Texas market next month. Some of the characteristics of these concept stores include care concierge centers, enhanced screening for chronic disease, phlebotomy services and personalized prescription support.

“There is excess capability in many of our clinics today and the scalability of that is not that difficult,” Merlo said.

Merlo expanded in a Q&A session about his thoughts on virtual care and where it can provide access to CVS Health programs where brick-and-mortar retail clinics don’t make sense. He pointed to dermatology as specialty where CVS would be able to expand service offerings through telemedicine.

As to where the company sees routes to save on medical costs, Merlo laid out a few key priorities including chronic disease management, readmission prevention, sites of care management and optimization of primary care.

Among the programs meant to fulfill these priorities are tighter integration in pharmacy and medical claims, reducing admissions by using retail community locations, providing home infusion services to drive lower cost sites of care, early identification of frequent ER users and expanding the scope of retail clinic services for early identification and management of chronic disease.

For complex chronic diseases the company is developing products to better manage chronic kidney disease, oncology and cardiovascular disease interventions.

One early experiments mentioned by Merlo include using the company’s retail pharmacists to provide adherence support, counseling and outreach for high-risk Aetna members. The company is also launching a pilot allowing Aetna care managers to facilitate the scheduling of retail clinic follow up visits for patients unable to see their provider.

Ultimately these programs, according to Merlo, will not be limited to Aetna members, but will function as a platform for other payer organizations and health plans.

“If you look at the status of the marketplace today, the lines are blurring like never before,” Merlo said. “We can be competitors and at the same time we can be can business partners.”