Health care deals could make you healthier, but will you save money?
The health care industry’s fever for consolidation has shot up with two major deals closing out 2017, but the big question is whether consumers should be feeling any better this year.
DaVita Medical Group, which has nearly 300 medical clinics along with about 40 surgery centers and urgent care clinics, will become part of United Health’s prescription drug benefits division.
CVS Health’s own pharmacy benefit management (PBM) business and instore clinics would be merged with Aetna. PBMs negotiate deals with drug makers that include rebates and other compensation to encourage certain drugs and come up with lists of drugs their insurance plans will cover.
The deals will move the industry closer to a model in which doctors and insurers are part of the same company, in a “Kaiser Permanente-esque way,” says Craig Garthwaite, who leads the health enterprise management program at Northwestern University’s Kellogg School of Management. Under that scenario, there would be no incentive for health care providers to perform more tests and procedures than necessary. Instead, they would be pushed to make sure patients get the right care from the start and to keep them healthy.
Since it became law under President Obama, the Affordable Care Act’s concept of health care reform focused on “paying for better health rather than the utilization of health care services,” Garthwaite says.
Susan Hayes, founder of Pharmacy Outcomes Specialists, which audits PBM contracts for employers and unions, says the recent deals are just the first of many, and she’s worried about the effects. “More mergers of insurance companies, chain pharmacies and (health care) providers means less transparency and higher costs — bottom line,” she says.
PBMs are billed as a way to lower drug costs for employers and consumers, but they’ve increasingly come under fire as drug prices have soared.
Critics of PBMs say the companies sometimes agree to favor high-cost drugs on the lists of medicines your insurer agrees to pay for and that they agree they won’t place quantity limits — or prior authorization programs — on the drugs. That’s despite the fact doing so could help health plans save money and make medical sense,
How these deals could affect you:
❚ You might get healthier. The com-
panies will have a strong incentive to make and keep you well. Right now, CVS’ Minute Clinics don’t have that incentive, as the more you show up there, the more money they make. Currently, Aetna, and the employers whose plans they administer, already have a strong profit motive to keep patients healthy. But without employing the doctors or owning the hospitals, they can’t truly control how many tests, prescriptions or visits you get. When the insurer and the health care provider are one and the same, you’re more likely to find things that encourage health to be covered.
Dave deBronkart, a cancer survivor and patient safety advocate, is “in favor of any evolution that makes it easier for people with health problems to get the care they need.” But whether that will happen, he says, is “hard to assess” at the time of a merger. ❚ Your care could come under one
roof. Davita — best known for its dialysis centers — could help launch United Health into the movement away from high-priced hospital care. Emergencyroom visits are the costliest form of health care for insurers, in large part because of the higher costs involved in running a hospital and the fact that, under law, ERs have to at least stabilize all patients who show up. With more of these clinics, and expanded versions of CVS’ clinics, these insurers will have a place to send patients where they can control most types of care. ❚ You might save money — or not. If insurers save money on healthier patients, it’s far from clear whether they will pass it along as lower premiums, Garthwaite says. ❚ You may not have as much
choice. Teresa Stickler, an Arizona pharmacy owner, founded Pharmacists Unity for Truth and Transparency because of what she calls “abusive practices” by PBMs, such as steering consumers to drugs with higher list prices. Now these insurance companies will be able to steer you to the doctors and drug stores they want you to go to, or at least make it even costlier to go elsewhere, Stickler says.
Hayes predicts in the “very near future,” we’ll see a health care company that includes a drug manufacturer, wholesaler, retail drug chain, insurers, doctors and clinics.
“Then there will be no negotiation possible at arm’s length,” she says.