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Potential Benefits of Healthcare Consolidation


Bruce Feinberg, DO: Rapid fire, secondly: What are the potential benefits? I’d like if you could enumerate 1 or 2 benefits for each of the parties, or if you think that you can’t figure out why this party’s going in. Somebody, go for it.

Dana Macher: The PBM (pharmacy benefit manager)—payer relationship and the ability to manage across benefit was a really quick one.

Bruce Feinberg, DO: I was struggling a bit with that because when they first started coming out one after another, I was thinking, “But these PBMs have multiple payers.” There was always that concern. When you make those alignments, are you casting off all these other payers who are potential clients because now you’re in bed with one? That was a struggle for me in understanding the PBM logic. Does anybody have a response to that?

Mark S. Soberman, MD, MBA, FACS: Actually, I would add on to that. I’m still trying to figure out where in the value chain the PBMs add value and whether that’s ultimately a business model that is going to be sustainable.

Michael Kolodziej, MD: That’s why it was a great move for Express Scripts to go to Cigna, because they secured their future.

Mark S. Soberman, MD, MBA, FACS: Absolutely.

Dana Macher: They lost Anthem.

Michael Kolodziej, MD: They did not see a future in which they were going to have a growth, a potential to have multiple, different clients.

Bruce Feinberg, DO: You’ve worked on the payer side, and you could argue the PBMs are the only adult in the room. Somebody had to say no. The payers weren’t going to do it in-house, so they outsourced it to somebody who could say no. That was the role that they were serving.

Michael Kolodziej, MD: When I worked at Aetna, CVS was our preferred pharmacy provider. Obviously, they were independent. Coordination of benefits was a nightmare. Getting medical policy to match up was always challenging. Deciding who was responsible for what was always an issue. And CVS would sell against a comprehensive health benefit that Aetna was offering. They would literally have meetings together in the morning and then in the afternoon go to the same self-insured plan sponsor and sell against one another. I do think that it allows the strengths of both to complement each other. Of course, Anthem is building their own PBM now. Cigna was the only one who really didn’t have their own PBM. CVS will, of course, with the Aetna merger going through, have the integrated thing. To me, it’s a safe move. It’s not a particularly innovative move.

Bruce Feinberg, DO: It’s a good segue because the next question is, Are there any innovations that you foresee coming out of these mergers?

Mark S. Soberman, MD, MBA, FACS: I’m watching what United and Optum are doing with great interest because when you look at this organization that has vertically integrated and you look at all the building blocks they have put together, they’re now in data analytics, they’re in advisory services, they’re in population health, and they’re in ambulatory surgery. They’re the largest employer or physicians in the country. They surpassed Kaiser with their DaVita acquisition. And now, of course, they’re a huge payer. The question is, How do you put all those building blocks together? I’m sure they’re scratching their heads trying to figure it out, but that is fascinating to me.

Bruce Feinberg, DO: I’ve heard rumors that they’re not going to be in the payer business for that much longer.

Mark S. Soberman, MD, MBA, FACS: That may be true.

Michael Kolodziej, MD: I actually love both the Aetna/CVS and Humana/Walmart deals. I’ll tell you why. There are 2 models that I think are interesting. How many times have you had a kid with an earache and the pediatrician couldn’t see him? How many times did your wife or daughter have a UTI [urinary tract infection] and the doctor’s office was closed? Getting primary care closer to the consumers of primary care will massively improve the efficiency of the delivery model. Now, that could happen with Teladoc too. I’m not saying it’s the only solution, but I’m just saying that you’ve got your Walmart Supercenter open 24 hours a day, and they’ve got a walk-in clinic. They’re very, very efficient. It’s a heck of a lot cheaper than going to the doctor’s office.

Bruce Feinberg, DO: But the use of antibiotics is 60% inappropriate.

Michael Kolodziej, MD: And that’s no different from everybody else. Let’s not point fingers.

Dana Macher: It’s Humana, and Humana is a huge Medicare Advantage advocate. Think about who goes into your Walmart stores. I agree. I think it’s very logical.

Bruce Feinberg, DO: Voices are coming up; this is what I love.

Michael Kolodziej, MD: Let’s talk about chronic disease management, a fascinating idea. That’s where all the money is spent, right? Most of the money is spent on people with a lot of medical problems. Let’s say you made it easier for a diabetic patient to meet with a nutrition person. Now, I don’t know about you, but in my practice, having a nutritionist on-site to visit with my patients was impossible. Here we’ve got Walmart. Walmart’s got the diabetic specialist, a nutritionist, there in the Walmart store.

You go to do your grocery shopping, and hint, hint: social determinants of health and a diabetic counselor. Just think about the ability to form a stickiness with people with chronic disease. “Hop on the scale, Mrs. Congestive Heart Failure, and let’s see how you’re doing. Oh, that Campbell Soup you have there, that’s not going to work so well. Why don’t we find something else?” It’s just really cool to think about how we could change the chronic care delivery model in a consumer-friendly way, a way that people are comfortable doing it. I think that would be amazing.

Dana Macher: It’s not just the brick-and-mortar aspect of it but what we were talking about earlier as well: the data aspect, to be able to manage patients. Pull up an app. Have alerts. Have whatever it is that they need to manage a chronic patient.

Bruce Feinberg, DO: That’s going to happen because Walmart has deep enough pockets to make that happen, whereas it never would have happened if it was just on the payers’ side.

Dana Macher: Walmart, Amazon, Google, or whoever is getting into this space is going to make this happen. I think Apple has plans to actually put some clinics out there. I think that it will happen.

Michael Kolodziej, MD: Let’s remember, traditional health plans are conservative organizations. Aetna or Humana would never, ever do this on their own.

Dana Macher: Right. I think it’s disruptive.

Michael Kolodziej, MD: It’s really interesting because the partnership doesn’t sound like it’s complementary. That’s what people say when they see my wife and I together: “What’s the attraction?” The truth of the matter is they really are complementary, right? It’s all about taking a really innovative, customer-friendly consumer face of organization and marrying it to somebody who knows something about how to deliver outcomes.

Dana Macher: Absolutely.

Mark S. Soberman, MD, MBA, FACS: And given the fact that there’s a payer in this mix, they can leverage their networks in terms of continuity of care, specialty care, and inpatient care to have this seamless network, with the portal of entry being the primary care and the chronic disease management, as you said so well.

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