CVS-Aetna combination to face vast data integration challenges

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CVS Health looks to become a large healthcare information powerhouse with its recent announcement of plans to acquire national health insurer Aetna in a deal valued at $69 billion. Industry experts say the proposed mega merger—the largest in healthcare history—will thrive or flop based on how well the companies rapidly integrate their vast, disparate pools and streams of consumer, patient and member data.

The challenge will be to develop unique IT systems to access, analyze and deliver that information in innovative and useful ways, primarily to serve and please customers, these experts say.

Technical competence in large-scale system integration coupled with creativity in designing new systems no one has ever seen before are both going to be needed for the CVS/Aetna deal to work, according to John Sarich, vice president of strategy at VUE Software, Coconut Creek, Fla., a developer of software systems for health insurance companies.

“The interesting thing is to map out the ecosystem and what it’s going to look like,” Sarich said. “They’re going to have to create technology. That’s the challenge here. It’s all the unknowns.”

With their combined data, CVS and Aetna should be able to draw correlations across different venues of patient care, according to Brad Haller, mergers and acquisitions practice director at West Monroe Partners, a Chicago business and technology consulting firm.

“My payer (would know) that I have a pre-existing condition,” he said. Armed with that information, “I’d expect CVS to know so much more about me to enhance the user experience.” Creating this proposed one-stop shop for consumers “would cost hundreds of millions and take 18 to 24 months, if not longer," Haller said.

But Haller also noted the deal is highly leveraged, with CVS funding the $47 billion cash portion of the purchase with borrowed money. And so, while the synergies from merging CVS and Aetna data and operations could produce savings, “I don’t believe there is much going to be left over for the employee,” Haller said. “There might be some for the employer.”

Also See: CVS-Aetna merger could shift patient flow and business models

Next steps, however, must be to create deep data profiles on the company’s customers that trigger actions in real time without appearing “creepy” about it, said Bruce Carver, associate vice president of payer services at MedeAnalytics, a healthcare data analytics firm in Emeryville, Calif. “That could be the difference between someone getting a phone call who’s a new diabetic three months later, or the week they’re diagnosed,” Carver said. But the incentives, “need to go back into the member’s pocket.”

CVS declined a request to provide an executive to be interviewed for this story. In a prepared statement, Larry Merlo, president and CEO of CVS Health, contended than the merger will “remake the consumer healthcare experience,” creating a new system that’s “easier to use and less expensive for consumers.” The company noted that the 30 million Americans who have diabetes cost $245 billion a year to treat. These patients could be receiving remote monitoring of their blood glucose levels and text messages when their levels are out of range, as well obtain face-to-face counseling on weight control, nutrition and medication adherence. All these services could be delivered at CVS’s store-based health hubs.

Early this year, under federal regulatory pressure, Aetna pulled out of a proposed $37 billion merger with No. 5 insurer Humana. The CVS/Aetna deal, too, may run afoul of the feds, according to Kate McCarthy, senior analyst for digital business strategy in healthcare for Forrester Research, Cambridge, Mass. “I don’t think this is anything close to a slam dunk,” McCarthy said. Generally, to overcome fed objections, “There has to be some benefit coming down to the consumer,” and despite all the talk about revolutionizing the customer care experience, McCarthy doesn’t see it happening.

CVS operates walk-in Minute Clinics at 1,100 of its drug stores and is in the midst of a clinical data analytics system upgrade with Epic Systems, Verona, Wis., which provides the clinics with electronic health records systems.

A strong platform for data sharing “enhances collaborations such as CVS and Aetna,” said Alan Hutchison, Epic vice president of population health, in an email.

Michael Munger, MD, president of the American Academy of Family Physicians, viewing the merger from a family doctor’s perspective, said the big question is, “will that data be shared with all physicians for coordinated care or will it be more fragmented.

“One of the things you want to make sure of is having good continuity and communication and data is given to primary care physicians in a timely manner,” Munger said. “Whether it impacts patients, it’s too early to tell.”

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