CVS Health CEO Outlines How Aetna Deal Will Benefit Customers

The chief executive officer and president of CVS Health said the integration of CVS and Aetna is well underway—even while it complies with a US district court that is reviewing the deal—more than a month after the acquisition closed.

“Our transformation is working and is already underway,” Larry Merlo told the 37th Annual JP Morgan Healthcare Conference Tuesday in San Francisco. He announced that a new concept store will open in Houston, Texas, and that the company will roll out new programs to help patients manage chronic diseases and improve care.

The company will launch care management plans for 5 common chronic diseases, including asthma, cardiovascular disease, diabetes, and behavioral health.

It also plans to tightly integrate CVS and Aetna programs to help prevent readmission to hospitals and increase utilization of lower cost of care sites in order to avoid emergency departments visits. For instance, an Aetna care manager will schedule a Minute Clinic visit within 14 days of hospital discharge and educate the patient about the risks of nonadherence, he said.

Merlo said the company will also “expand MinuteClinics to help with early identification and management of chronic disease” and create initiatives to manage complex chronic diseases in kidney and cardiovascular disease. Merlo said the company’s transformation will put a focus on consumers by improving patient engagement, improve healthcare outcomes, lower healthcare costs.

He gave the example of a patient undergoing a knee replacement. Currently, a patient might be at risk of a lack of coordinated care, no transportation to and from appointments, delayed follow-up, and a lack of communication. In a new effort to “simplify the patient journey” CVS Health would coordinate the communication, the transportation, and provide supplies, Merlo said.

Combined spending on these new programs, including making over CVS stores, will cost about $2.6 billion, which Merlo called “manageable.” Some CVS pharmacies will get a “light refresh” while others will be overhauled more extensively, he said.

Last year, the Department of Justice cleared the $69 billion merger. Judge Richard Leon of the US District Court for the District of Columbia is continuing to review the deal, and has asked that the companies keep some operations separate until he completes his work.

Company pressures include “less impactful break-open generics,” and continued pricing and reimbursement pressures, Merlo said. Forces benefitting the company’s outlook include strong retail prescriptions, continued growth in Medicare Advantage plans, and growth in specialty drugs.