CVS Health and Aetna come together for big data for healthcare

Posted Dec 6, 2017 by Tim Sandle
CVS Health and Aetna have come together to form a new organization that aims to restructure healthcare. The deal between the two enterprises is valued at $69 billion.
A CVS/pharmacy store is pictured on February 5  2014 in Miami  Florida
A CVS/pharmacy store is pictured on February 5, 2014 in Miami, Florida
Joe Raedle, Getty/AFP
While the primary focus of healthcare is with treating patients, providing care and developing new medicines, the digital age has brought in a new focus in terms of data gathering, data analyzing and using this data in new ways. This ranges from wearable technologies designed to collect vital signs for clinicians and technology providers, to designing precision (personalized) medicines for individual patients.
For some health technology developers the collection of (or access to) big data for analytics purposes is very lucrative. Information about the performance of a heart monitor or smart inhaler, for example, helps with future product design and allows forecasts to be made. With smart inhalers for example, knowing the time and location when inhalers are used helps with planning, portability of design and so on.
Digital pharmacy services
Most digital and data driven health technology activities either stem from big pharma or through start-ups offering niche products. This is why the CVS Health and Aetna merger is causing ripples of interest in the health technology sector. The aim of the merger is to foster a healthcare and analytics behemoth.
Aetna offers pharmacy services and insurance, selling traditional and consumer directed health care plans like medical, pharmaceutical, dental, behavioral health, long-term care, and disability plans. CVS Health is an U.S. retail pharmacy and health care company headquartered in Woonsocket, Rhode Island.
Better drug prices and lower-cost insurance
The acquisition provides CVS with an economy of scale to bargain for better prices for the prescription drugs it sells through its pharmacy business. The coming together also fortifies Aetna's insurance business; this will be through offering customers lower-cost co-payment schemes, via CVS stores.
One outcome of the merger is a large data pool that links into the personalized medicine market, especially in relation to chronic conditions and the wider coordination of care. The two companies plan, according to Zdnet, to utilize the physical and digital footprint of CVS Health with Aetna’s insurance payments.
Accessing valued data streams
Both companies have highly valued data streams. Aetna has strong analytics architecture, partly focused on reducing insurance fraud; and CVS has clinical and pharmacy benefits data. These will be used to offer new services to patients; improve health consumer engagement through providing both physical and digital health services; and provide digital health guides to allow consumers to navigate through the complexities of the U.S. healthcare system.
The company will also use data to promote its own internal efficiencies, such as making use of predictive analytics to target consumers of health insurance according to risk and by offering different health insurance rates where healthy behaviors arte promoted.
According to CNBC News another reason for the deal could be in preparation for Amazon’s expected entry into the pharmacy business and the resultant disruption that the e-commerce group will not doubt cause.