Earlier this month, CVS announced plans to buy Aetna— one of the nation’s largest health insurers—in a $69 billion deal. Aetna and CVS pitched the deal to the public largely on the promise of controlling costs and improving efficiency in their operations, which they say will inhere to the benefit of consumers. The media coverage since the announcement has largely focused on these claims, and in particular, on the question of whether this vertical integration will ultimately lower health care costs for consumers—or increase them. There are both skeptics and optimists. A lot will turn on the effects of integrating Aetna’s insurance with CVS’s pharmacy benefit manager services.
But CVS and Aetna also flag another potential benefit that has garnered less media attention—the promise in combining their data. CVS CEO Larry Merlo says that “[b]y integrating data across [their] enterprise assets and through the use of predictive analytics,” consumers (and patients) will be better off. This claim merits more attention. There are three key ways that Merlo might be right. Continue reading