Affordable Care Act / Healthcare

Your Health: CVS Health’s Expansion in the Health Care Marketplace

Recently CVS Health has entered partnerships with 41 different health systems that will connect their minute clinics with the electronic medical records of said health systems. The most recent of these agreements is with MedStar Health, an expansive and high quality medical system centered around the Baltimore and D.C. areas. This agreement between MedStar and CVS also connects the pharmacy of CVS to the MedStar system, and is the 9th such agreement created. Such a connection means big things for both companies and their patients as well as demonstrates the larger push by all retail pharmacies to expand their share of the health care marketplace.

CVSFor CVS this move creates a partnership with physicians that will refer their chronically ill patients to their pharmacies, resulting in more customers, and therefore more profit. These physicians and providers are willing to make these referrals because the connection allows them to track if their patients are filling their prescriptions and properly managing their care. This ability assists the providers in consulting with their patients and should foster a more beneficial relationship between the two parties. Furthermore, the connection between the hospitals and the minute clinics is expected to allow the health care system to provide more comprehensive and affordable care, while giving them an even greater influence in the community.

The ability for hospitals to reduce their costs and improve their coverage network is something that hospitals have to focus on in the new health care environment. The Affordable Care Act has restructured several areas of Medicare payment, the most prevalent of which is the reduction of payment to those hospitals with high readmission rates. These cuts in payments are expected to reach as much as 3 percent of the all Medicare payments, and they are expected to account for roughly $330 million annually across the nation. For health systems like MedStar, these partnerships with CVS are seen as ways to help combat the readmission rates of patients with manageable chronic illnesses.

Hospitals expect that these partnerships will help to reduce their readmission rates for a couple of reasons. The first, and perhaps most important, action that can be taken because of these partnerships is that doctors can better track if their patients are taking their meds. This is something that providers have typically not been able to do in the past and is believe that it will help create better relationships between the providers and patients. These better relationships are expected to result in better disease management. And because CVS Minute Clinics will have access to patient information, more doctors will be suggesting that their patients visit these clinics to help manage their condition rather than coming back to the hospital when serious complications occur.

There are some questions that do arise from the creation of these partnerships. What are the benefits for the patients? The main benefit for the patients is that their care will be much more integrated and efficient. The ability of the minute clinics to pull up their health records will allow them to visit these clinics with relatively minor complications, while still keeping their primary doctor in the loop. It also helps that these minute clinics are significantly cheaper than visiting their doctor, with most services provided being under $100. Are these partnerships appropriate actions for top medical systems in this country to take? The answer to this question is absolutely. Allowing providers to expand their network – be it indirectly – into the community is never a bad thing. The extension of the influence of health systems that are the quality of MedStar in the community is something that will have a great impact on the health of our nation. Also, it does not hurt that this action will help reduce our nation’s spending on health care.

The expansion of the involvement of retail pharmacies in our health care system is something that could have a great impact on the health care system. The initial actions that these companies are taking should have had a positive influence on patient care and care coordination. Because of the early success of these partnerships it is to be expected that there will be many more of them being created in the not too distant future.

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One thought on “Your Health: CVS Health’s Expansion in the Health Care Marketplace

  1. Pingback: NPs, PAs, and MDs, Oh My! | Policy Interns

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