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CVS to buy Aetna: What it means to you


CVS confirmed that it’s buying Aetna for $69 billion in a deal that will help the drugstore chain reach deeper into customer health care and protect a key client.

CVS Health Corp. released a statement Sunday saying it will pay cash and stock for Aetna Inc.

Here’s what it could mean for the average consumer:

1. LOCATIONS: The mammoth acquisition pairs a company that runs more than 9,700 drugstores and 1,100 walk-in clinics with the third-largest insurer that covers about 22 million people. There are more than 50 CVS locations in this region.

2. CLINICS: The evolution won’t happen overnight, but in time, shoppers may find more clinics in CVS stores and more services they can receive through the network of nearly 10,000 locations that the company has built.

“They’ll be pretty much a soup-to-nuts health company … except for the hospital part of it,” Craig Johnson, president of Customer Growth Partners, a retail consulting and research firm, told the Associated Press.

3. MANAGING CARE: Patients also may find the CVS-Aetna combination much more involved in managing their care, especially for those with expensive chronic conditions like diabetes. The bulked-up company also may gain more negotiating leverage over prescription drug prices, but it’s far too early to say how much or whether that benefit will trickle down to customers.

The $69 billion deal announced Sunday evening will push the drugstore chain more forcefully in a direction it has been heading for years, according to Wall Street analysts. The company, which stopped selling tobacco products in 2014 to further burnish its image as a care provider, already runs about 1,100 clinics and has been steadily expanding the health care it offers.

The clinics started off as a place to treat basic health care needs like sinus infections or strep throat. Gradually, CVS added services like blood draws or monitoring of chronic conditions such as high blood pressure and diabetes. Expect that trend to continue as the drugstore switches more from selling products in its stores to services that can’t be bought online, where retailers face formidable competition from the likes of Amazon.

4. PHARMACY BENEFITS: CVS Health Corp. is also one of the nation’s biggest pharmacy benefit managers, processing more than a billion prescriptions a year for clients like large employers and insurers including Aetna Inc.

Analysts say the combined company could add more clinics and expand in-store services to include eye care or maybe centers for hearing aids. That could gradually turn CVS into a one-stop-shop for health care, a place where patients can get a hearing aid checked, then see a nurse practitioner and pick up prescriptions.

Clinics aren’t especially profitable, but they are important because they draw people into the stores and help build deeper customer relationships, analysts say.

The clinics have become an attractive option for customers in need of basic health care because they are usually open longer than the family doctor’s office. A clinic visit also can be cheaper than a $100 doctor visit for someone who doesn’t have insurance, but they have drawbacks. Family doctors say they know their patients better and can check on their overall health during a visit rather than dealing with just the one issue that brought that person in.

5. COMPETITION: CVS isn’t the only health care giant delving into clinical care. The deal will help it compete with others like UnitedHealth Group Inc. The nation’s largest health insurer also runs clinics and doctor’s offices. Like CVS, it also has one of the nation’s largest pharmacy benefit management businesses.

6. BEYOND CLINICS: CVS and Aetna also want to go beyond just clinic visits to help patients and customers.

Aetna Chairman and CEO Mark Bertolini has talked frequently about how most of a person’s life expectancy is determined by genetics and location and not by clinical care, which is where health care spending is focused.

“Our conventional operating model is not effective,” Bertolini said earlier this year. “People are angry at this model. It doesn’t work effectively in controlling costs.”

He has talked about the need to get into patients’ homes to gauge what they need, like whether they have enough food or may need transportation.

CVS can help through its home infusion business, which sends nurses to patients’ homes to deliver complex drugs for people with hemophilia among other conditions. The clinic and drugstore locations could also give patients with chronic conditions like diabetes more convenient options to get their blood monitored or counseling on their condition.

Over time, health care experts say that can help keep these conditions from growing worse and stave off expensive hospital stays.

The Associated Press contributed to this story.



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