Physicians have no say in the mergers and consolidations shaping the future of primary care. But plenty is at stake for healthcare clinicians.
The giant players in healthcare—insurers, providers, pharmacies, and pharmacy benefit managers (PBMs)—are scrambling to get bigger and add capabilities in order to compete with each other and with new entrants in the industry, including Amazon and retailers like Walmart.
Some of the mergers could create a new model of primary care, one in which much of the care now provided by physicians in their offices could be done by mid-level providers working in retail settings.
“It’s the wild, wild West. Obviously, it’s going to be very disruptive to the primary care environment,” says Theresa Hush, CEO of Roji Health Intelligence, a Chicago-based consulting firm.
Mergers and acquisitions in healthcare are not new, of course. Recent decades have seen independent practices absorbed by multi-group practices which, in turn, join hospital-based healthcare systems, which have merged with other large systems. Those so-called horizontal deals join firms in the same market sector.
Some of the latest mergers are different, however, because they often involve not just healthcare providers, but insurers, retailers and PBMs, which are third-party administrators of prescription drug programs for commercial health insurers. These new transactions are vertical integrations, which blur the traditional lines that once delineated roles and responsibilities in the healthcare sector.
While the companies involved say the mergers will lead to greater efficiencies, lower costs, and better healthcare, the decisions are being made largely by profit-oriented CEOs, not those on the front line of daily patient care. Not surprisingly, many doctors are skeptical of the motives and outcomes.
“I fear that any merger in healthcare is going to be harmful for patients and doctors,” says Marni Jameson Carey, executive director of the Association of Independent Doctors (AID).
The deal drawing the most attention is CVS Health’s purchase of Aetna. The $69-billion deal, which has been accepted by shareholders of both companies and is awaiting approval from the Department of Justice, creates a company that is combines a pharmacy, insurer, PBM, and retail health clinic operator.
CVS, which has 1,100 convenient care clinics at its stores, intends to add more and expand their services with the goal of becoming a “community-based health hub” that can improve patients’ health and answer their questions about their health conditions, as well as prescription drugs and health coverage, according to the company.
All of the above sounds like the role of primary care physicians, says Carey. “I think this is a step for insurance companies to get into the business of providing healthcare, which is a business I don’t think they should be in,” she says, adding that insurers are more likely to be concerned with their bottom line than with patients’ health.
Since that deal was announced last December, it’s been reported that Walmart is in talks to buy Humana, a transaction which would create a similar hybrid of retailer/pharmacist and insurer.