Will CVS-Aetna Merger Lead to “Separate But Unequal” Healthcare?

Last week, pharmacy giant CVS agreed to purchase Aetna this week for an astounding $69 billion dollar sum. The company allegedly plans to reduce health spending by developing an integrated system touted as “a new front door for health care in America.” This merger is actually an acquisition, entailing transfer of ownership. The central aim of an acquisition is to increase market share, expand the scope of services provided, and improve financial stability. CVS hit the jackpot on all three objectives. While Wall Street investors celebrate, many of us knowledgeable in the delivery of healthcare services are wondering who will bear the responsibility for the patients harmed by this experiment?

Aetna has compiled vast amounts of data from 22 million health plan members. CVS provides pharmacy benefits management to nearly 90 million consumers. Together, with 10,000 stores and 1,100-minute clinics already in the CVS network, this acquisition will create a ‘Walmart for Healthcare’. Applying bulk-purchase business strategies to the sale of merchandise is one thing, while providing healthcare services by ‘trial and error’ to human beings is another matter entirely. Bypassing physicians to deliver healthcare by protocol categorically jeopardizes patient safety.

Executives at Aetna-CVS plan to utilize pharmacists and nurses in the evaluation of acute illness and management of chronic disease. If an insurer, drugstore, and pharmacy benefit manager unite as one, it will usher in an era of medical “segregation,” with segregation defined as the isolation or separation of a race, class, or group by enforced or voluntary restriction, by barriers to social intercourse, by separate educational facilities, or by other discriminatory means.

CVS-Aetna executives are hypothesizing these clinicians working independently can provide “separate but equal” healthcare services at a lower cost than physicians. There is no scientific evidence their assertion is true or even possible. Their innovative business model will be, in a word, an experiment on citizens of this nation. In Brown v. The Board of Education in 1954, the Supreme Court already ruled unanimously “separate educational facilities are inherently unequal” and are in violation of the Fourteenth Amendment equal protection clause (“no state… shall deny to any person…the equal protection of the laws.”)   Why is “separate but equal” acceptable for healthcare? It is not.

For example, recently, a mother brought in her 18-month-old with a fever, runny nose, and ear pain. On examination, he had an ear infection and was prescribed Amoxicillin. The next evening, he refused oral intake, and developed a rash in his mouth, and on his hands and feet. The mother took him to a retail clinic after work that evening. “Minute Clinics” are convenient because they accept walk-ins, charge by the visit, and order tests by protocol, like when ordering dessert, a la carte in a restaurant.

At the retail clinic, a rapid flu test was negative and a rapid streptococcal test was positive. Using this “information” to guide diagnosis and treatment by protocol, his “Strep Throat infection” in conjunction with a rash was assumed to be Scarlet Fever, which was theorized to be “resistant to Amoxicillin.” The clinician prescribed Omnicef inappropriately, believing something “stronger” was required for Streptococcal bacteria.

Having regular commercial insurance, the mother returned to my office for medical care when her son continued complaining of ear pain despite the “stronger” antibiotic two days later and his oral lesions continued to multiply. His exam revealed Herpangina (a variation of the hand, foot, and mouth virus) and his eardrum was now bulging with pus. I recommended restarting the amoxicillin and for her son drink cool liquids until the oral lesions resolved; the child recovered uneventfully.

Pharmacists and nurses will be thrust into independent roles for which they are ill-equipped to handle and if using this shotgun approach, costs will continue their upward climb. First, children under two rarely get streptococcal throat infections, so strep tests should not be routinely administered in this age group. Secondly, symptoms of streptococcal infection are narrow: sore throat, fever, swollen lymph nodes, and abdominal pain in the absence of a runny nose and cough. A positive test in this child indicated they were a carrier which needs no intervention. Third, scarlet fever looks nothing like herpangina, which is a virus and resolves on its own. Fourth, Omnicef, at a cost of $150 per course, is not a first, second, or even third-line treatment for Group A Streptococcal infection; the first line choice is amoxicillin, costing less than $5.

If this ill-advised merger between Aetna and CVS proceeds, millions of lives will hang in the balance. This new business model reminds me of the scene from Dickens’ A Christmas Carol, when Ebenezer Scrooge sees the Cratchit family mourning the loss of Tiny Tim. Research has shown life expectancy is proportional to the ratio of primary care physicians available per 100,000 population. How many children, like Tiny Tim, will be harmed before lawmakers and the public refuse to accept a future devoid of primary care physicians?

Thankfully, time has a way of revealing truth. CVS considers having a medical degree to be an “obstacle” to affordable medical care, which they plan to eliminate with “one-stop shopping,” having pharmacists and nurses practicing medicine by protocol. A segregated, two-tiered healthcare system will ultimately emerge as Aetna members are directed to “Minute Clinics” without access to physicians while those on other commercial insurance plans will see the physician, nurse practitioner, or physician assistant of their choice. Changing the delivery of healthcare services by circumventing physicians to save money is equivalent to gambling with patients’ lives. This vertical business model should induce fear and panic in all of us – we should run for our lives, literally and never look back.

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11 replies »

  1. While I understand your concern about Nurse Practitioners or Physician Assistants practicing independently, I do not understand why you are including Pharmacists in this article. Pharmacists do not prescribe drugs, do not diagnose patients and do not work in Minute Clinics. At CVS, they mostly fill prescriptions, solve issues with PBM coverage and occasionally counsel patients. I should know, I’m a Pharmacist. So, what specifically are your concerns about Pharmacists practicing independently?

  2. This is pure money move. The rest of the “genius bar” or “walmart of healthcare” move is a pathetic care model idea. Just wait till the pharmacists and allied health people get their first lawsuit trying to practice medicine. Their heads will spin when they get laid out in a malpractice case. So it will be a revolving door of nameless ‘caregivers’ that will not know one patient from another, that will make a mess of actual care, fragment it more, and make it markedly more costly and worse of all it will hurt patients. This McDonald’s approach of every hamburger is the same and wanting to follow a cookbook to take care of patients, is doomed to failure and it will fail very fast. And yeah, I am that one that will be saying “I told you so” when this fails.

  3. Barry I agree with you on all fronts. I’m not worried about losing patient business, it’s more about patients losing their lives.

  4. While I’m just a financial guy and not a medical professional, I’m a skeptic about this merger. I don’t fault Aetna for maximizing shareholder value agreeing to sell out to CVS for a premium price. I think CVS shareholders will be disappointed because the strategy is not likely to lead to a good outcome financially.

    The experts tell us that 75%-80% of U.S. healthcare costs are attributable to patients with chronic diseases and conditions including CAD, CHF, COPD, diabetes, asthma, hypertension, depression, dementia and substance abuse. That includes virtually all of my own claims. While keeping people out of the hospital is a laudable goal, anyone with a cardiac complaint who presents at a Minute Clinic or even an urgent care center is likely to be sent to the ER. People with diabetes, asthma, mental illness, etc. will benefit from having a long term relationship with a good primary care doctor with a strong specialist referral network. They shouldn’t be relying on Minute Clinics though they are fine for flu shots. There just isn’t a lot of money in primary care which only accounts for about 6% of healthcare costs to begin with.

    UnitedHealth Group owns one of the three largest PBM’s (Optum Rx) and I haven’t noticed any big reductions in drug costs led by them. Indeed my own AARP / United Part D plan increased in premium cost from $37 per month in 2012 to $86.20 for 2018 which equates to more than a 15% compound annual growth rate (CAGR).

    United also acquired Southwest Medical Associates, an HMO in Las Vegas, almost 10 years ago. More recently, it acquired MedExpress, a chain of urgent care centers which it’s rapidly expanding. It also acquired a chain of ambulatory surgical centers and is intent on expanding that too. Just last week, it announced the acquisition of DaVita Physician Group for $4.9 billion. It’s expanding on the provider side which I think is a sounder strategy because the most promising way to shrink or at least slow the growth of healthcare costs is to move more and more care from a hospital inpatient setting to outpatient or out of the hospital altogether such as to an ambulatory surgical center where procedures can be done for half the cost of what a hospital is paid.

    Bottom line: CVS is barking up the wrong tree on this one and good primary care doctors are not going to lose any business to the CVS-Aetna combination in my opinion. As a patient with CAD, I wouldn’t trust them with anything more than a flu shot and I even go to my primary care doctor’s office for that.

  5. Thank you for your thoughts and insight. It seems to be about greed and making money at the expense of patient care

  6. With you on your point Dr. Palmer, I almost went the route of monopoly but the monopolies never seem to care about this little ole’ solo doc. You are absolutely right. It is scientifically proven that monopolization does NOTHING for people.

  7. Thanks Dr. Nelson. “urgent care waltz” I like that though I would call it the “minute clinic stumble.” 🙂

  8. Not to mention that a rapid strep test is not very accurate. Putting aside the diagnostic issues underlying the “urgent care waltz,” I still vote for a nationally sanctioned means to locally authorize the cooperative development of equitably available, enhanced Primary Healthcare that is offered to each citizen. It seems odd that the large healthcare enterprises have, so far, said nothing about all of this, i.e., Partners in Boston, Mayo Clinic, Cleveland Clinic, etc.

    Kudos to Niran…again!

  9. Cvs-Aetna, as an oligopoly, will be able to “make” prices….which means they can affect selling prices because of their size. Then they will exert monopsony purchasing on NPs and PAs and drugs. This means they can affect purchase prices too, including labor costs. Then they will surely become a target for government takeover…as the public will have had it up the gazoo and the entire economics of health care will disintegrate into non-sensical prices and striking labor forces and a litigation jamboree.

    As you say, about as wrong as possible. Anti-trust goes ape-suspicious when two docs discuss business alone by themselves (it is against the law for docs to discuss their prices with one another), but are asleep when the apocalypse of monopoly-monopsony is about to occur.

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    I don’t know WTF this speculation BS is all about but $45 B in debt calls this a loser

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