March 13, 2018

Five Ways to Tell if CVS-Aetna is Really Going to Transform Care

by Lisa Bielamowicz

THE GIST

If CVS-Aetna makes the investments necessary to create a real care ecosystem, the merger could present a huge threat to traditional providers by shifting consumer loyalty away from doctors and health systems

THE FACTS

OUR ANALYSIS

1. Transforming today’s MinuteClinics into “Health Care Hubs” will be a heavy lift

As a parent with two young kids who have a habit of coming down with strep throat on Friday evenings, I’ve had many opportunities to visit retail clinics. At our local MinuteClinic, it seems like there’s always a wait. Data confirms that a growing number of Americans are seeking care in retail clinics, with over 10 million visits annually. Utilization doubled between 2011 and 2016.

The provider at our MinuteClinic, most commonly a nurse practitioner (NP) working alone, does a fine job of diagnosing and managing the simple issues that bring us in. And research shows that they may actually provide higher-quality care, provided that they stick to managing a short menu of low-acuity conditions, vaccinations and simple physicals.

Few consumers visit a MinuteClinic for the ambiance, but the setting leaves a lot to be desired. In my last visit to a CVS MinuteClinic, it felt like I was meeting with the NP in a broom closet in the back of the store. Outside, six people were waiting in a cramped area with three chairs, spilling over into the vitamins aisle. A woman who was asked to provide a urine sample complained that the only facility was a cramped, employees-only bathroom in the stockroom. It’s a far cry from what most expect from a more comprehensive primary care provider—which is what CVS wants its Health Care Hubs to be.

I felt like I was meeting with a nurse practitioner in a broom closet in the back of the store. It’s a far cry from what most expect from a full-service primary care provider

To build a Health Care Hub that provides an integrated health care experience, and serves as the locus of managing chronic conditions like diabetes, CVS-Aetna will need to invest in additional space, staff, clinical exam and lab capabilities. And they’ll need to upgrade to a professional look and feel.

It’s not the first time retail clinics have moved in this direction. A few years ago Walgreens upgraded the capabilities of a handful of its “Take Care” clinics. My experience with these was great: I was able to schedule online, and a staff member checked me in on arrival. The clinic was spacious, and in located a separate area away from the diapers and Doritos. The two exam rooms felt like a doctor’s office, and I was in and out in under 30 minutes. Easy to see how that could be an acceptable substitute for traditional primary care.

Walgreens hasn’t scaled that concept. My guess is that their significant investment in facility and staff wasn’t rewarded with increased clinic billing or boosted retail spend (a perverse effect of efficiency: no waiting means no shopping). But unlike Walgreens, CVS-Aetna won’t be tied to the traditional pharmacy business model.

2. If CVS-Aetna succeeds, health systems could face significant competition from a new, low-cost “healthcare ecosystem”

The CVS-Aetna Health Care Hub is a bid to offer primary care and disease management in a lower-cost (and doctor-free) setting. But the potential for consumer loyalty generated through an efficient, convenient ongoing healthcare relationship is an even greater opportunity.

If CVS can create an experience, whether through clinics or the digital tools they also plan to integrate, that keeps patients coming back over and over again, traditional providers have reason to worry. As consumerism comes to healthcare, providers are competing with health plans to win the consumer relationship. If consumers choose to become “members” of CVS-Aetna, the pharmacy chain will have the upper hand in directing patients to downstream providers, cutting off hospitals and doctors who are high cost or don’t play by their rules.

And what about the dozens of systems who have partnerships with MinuteClinics today? There’s no word yet on how relationships with health systems might change should the merger go through, but it’s a good bet that CVS-Aetna would not want to share the loyalty generated from an ongoing, comprehensive care experience.

3. The answers to five questions will determine if CVS-Aetna is moving toward creating a real system of care

A health system’s best defense is a good offense: building accessible, convenient, affordable and reliable care solutions that solve consumers’ health care problems.  But to assess whether CVS and Aetna are truly executing the Health Care Hub strategy, watch for these five things:

  • Is CVS investing in an enhanced set of care services and technology? Beyond the needed upgrade of services and experience in clinics, look for CVS-Aetna to invest in digital capabilities like online scheduling, telemedicine, and portals that integrate patient data.
  • Will pharmacists come out from behind the counter? 1,100 MinuteClinics sounds like a lot, but only 1 in 9 CVS stores has a clinic, and an NP to deliver care. CVS-Aetna will need to tap into the clinical labor they have in every store—the pharmacist—to take a much larger role in care management.
  • Will CVS bring care to underserved markets? MinuteClinics are disproportionally located in wealthier markets. Some pharmacy chains have been pulling out of lower-income areas, particularly inner cities, altogether, creating “pharmacy deserts”. CVS will need to bring better access to all of Aetna’s customers, including Medicare and Medicaid beneficiaries in low-income neighborhoods.
  • Can CVS navigate the tension between the front and the back of the store? One of the greatest challenges to the Health Care Hub’s success will be the employee responsible for performance in the front of the store: the retail store manager. Her incentives are still based on revenue per square foot, and she may not be confident that having a dozen patients with the flu waiting in the back of the store will help her sell shampoo and toothpaste.
  • Is the focus on consumer value, or boosting pharmacy and retail sales? Health Care Hubs will probably never generate enough pharmacy and retail revenue to offset their costs. Returns will come from attracting consumers to a managed network of care that starts in the store and extends far beyond it. Benefit design can help but retaining consumers over time will require the new venture to provide enough value to make them stay.

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