News of the $69 billion CVS-Aetna deal broke in early December 2017, but this story really starts a couple months earlier.
Before CVS moved to acquire Aetna, the healthcare industry started buzzing with reports that Amazon would enter the prescription drug market. A traditionally slow-moving industry suddenly faced the very real possibility of sitting in Amazon’s line of sight.
Now, industry leaders throughout the entire pharmaceutical supply chain have to find ways to maintain a competitive advantage.
The CVS-Aetna deal is a response to the undercurrent of disruption in healthcare delivery. But what does it say about how healthcare experiences will evolve for both patients and businesses?
Why Now Is the Time for Innovative Healthcare Experiences
In addition to the CVS-Aetna deal, UnitedHealth has announced a $4.9 billion deal to combine Optum and DaVita Medical Group.
Healthcare delivery innovators have received significant investment from VCs in recent years. However, big brands are just now making concerted efforts to consolidate healthcare experiences. Why now?
These deals and Amazon’s reported interest in the market come at a time when healthcare cost structures are shifting.
In the past, co-pays masked the prices of drugs for consumers. Now, consumers are paying high deductibles in their health plans and the costs of medicine are coming to light. In a Washington Post article, Brian Marcotte, president of the National Business Group on Health, said:
“When everyone started focusing more on the sensitivity around the price of drugs, that has brought more attention to the pharmaceutical supply chain model, and I think that’s why you’re seeing more activity around: How do you possibly do this differently.”
This shift is pushing healthcare in the same customer-centric direction that industries like retail and travel have been innovating around. Consumers have more information at their fingertips than ever before. And now, even in healthcare, customer experiences mean everything.
Pressure from Amazon aside, the demand for smoother and more affordable healthcare experiences prompted the CVS-Aetna deal and others.
How the CVS-Aetna Deal Impacts Experiences
The CVS-Aetna deal marks the combination of two major players in different areas of healthcare delivery.
CVS brings 10,000 retail pharmacies, over 1,000 Minute Clinics, and a lucrative services arm as a pharmacy benefits manager (PBM). On the other side, Aetna introduces 22 million members to the CVS network under its insurance operation.
Merging these two businesses collapses the supply chain and gets patients closer to one-stop care. It’s a level of convenience that patients aren’t accustomed to. And better yet, it opens the opportunity for CVS to lower prices thanks to better wholesale deals.
Rather than maintaining the middle layer of players in the supply chain, the CVS-Aetna deal compresses the process for better patient experiences.
However, simplifying the process and cutting costs alone can’t differentiate healthcare experiences—Amazon can win these battles as they have in retail. You have to take the next step to stand out in the new market for healthcare delivery.
Customer Conversations in Healthcare Delivery
In the early days of consumers being more responsible for medical costs, pricing is the key differentiator. But when you look at other industries that have been disrupted, you see many incumbent brands get caught up in a race to the bottom.
Drive down prices by consolidating the supply chain and shift your focus to providing the most innovative patient experiences. That means meeting patients where they are on mobile with lifetime customer conversations that maintain engagement at every stage of healthcare delivery.
We’d love to help you get out ahead of the evolving healthcare industry. Get in touch with me today if you want to learn more!