CVS and Aetna complete mega-merger, prompting fears of limiting customer choice
CVS Health agreed to acquire Aetna in what is being described as a blockbuster mega-merger earlier this week. The 69 billion dollar merger is the first between a drug store chain and an insurer, a move that, on Aetna’s part, is driven by visibility and on CVS’s is driven by competition, but the two are working hard to sell the public that this move was ultimately made with the common, everyday American in mind.
Both CEO’s have gone on record recently to say that this is about changing the way that healthcare fails to function for the people who use it, but rumors abound that in response to this move, either Wal-Mart or Amazon could make a play for Humana in order to add competition.
Although CVS says its plan is to create a network that streamlines care, the merger is not without concern. Some consumer advocates are arguing that this deal may actually limit customer choice, making it harder for new companies to enter a marketplace which is dominated by mega-corporations.
This also seems to hone in on territory which some hospitals have already began to explore, the creation of outpatient clinics and services designed to lower costs and keep patients from using the ER as a doctor’s office. This adds credence that this merger is not intended to do the public good. Aetna and CVS were already partners, but because CVS now has a large say in what goes on in the healthcare industry, this move stands to increase their role in negotiating prescription drug costs.
This move could definitely change the healthcare industry, but the indication is that it will not benefit consumers and customers as much as it will benefit the two companies that merged. This trend in the healthcare market leaves it particularly open for such blockbuster transactions and consolidation in the future. And since what works for businesses is often duplicated in order to increase competition and their bottom lines, expect Amazon or Wal-Mart to potentially follow suit, especially given the Trump administration’s pro-business, pro-capitalism stance.