The Aetna-CVS merger may be the impetus for an industry wide revamp of retail healthcare, as the combined company positions walk-in clinics to play an integral role in cost management of the Aetna population. This is the third in a series of blogs exploring the broader implications of retail clinics through various lenses.

Retail Clinics Through the Market Access Lens

The Aetna-CVS merger foreshadows core changes in the healthcare and prescription drug delivery space. As CVS Health transitions to a store-based health system, providers nationwide will expedite the opening of their own convenient care outlets—including partnerships with retail clinics—to enhance direct consumer care access. Market-specific dynamics like payer penetration, provider consolidation, and disease prevalence will help both integrated delivery networks and drugstores like CVS and Walgreens decide when, and where, to build their local touchpoints.

Now incentivized to lower the cost of care for Aetna enrollees, CVS is preparing to develop health hubs with expanded services targeting five major diseases: diabetes, cardiovascular disease, high blood pressure, asthma, and behavioral health. The vision is to create repeat patients, not just customers, and the eventual goal is to roll out a replicable hub-and-spoke model across all of CVS and Aetna’s major markets. Until then, the following markets may be among the first to see strategic enhancements like 1:1 educational and therapy sessions with pharmacists or providers, laboratory tests, and expanded diagnosis equipment.

We selected these markets primarily based on the penetration of CVS/Minuteclinics per 100,000 individuals (ranked by the largest 87 U.S. markets), cross-referenced with the penetration of Aetna enrollees in the commercial, Medicare, and Medicaid sectors. Other factors were also considered, as shown below.

Kansas City, Missouri:

Boasting the third-highest penetration nationally of MinuteClinics, Kansas City, Mo., also has one of the top 20 penetrations of Aetna patients, with nearly 8.4 percent of the market’s population enrolled in an Aetna commercial, Medicare, or Medicaid plan. Kansas City is Aetna’s fifth-largest managed Medicare market, meaning Aetna has a strong incentive to lower the cost of care for seniors through population health management at CVS’ clinics. As with Humana’s senior-focused primary-care clinics inside Walgreens Healthcare Stores and Cigna’s Medicare plan in South Florida tied to Leon Medical Centers, Medicare Advantage carriers are tapping into seniors’ needs for personalized, integrated care to improve health and star ratings. Aetna is late to the game, but it chose a well-positioned clinical partner.

Washington D.C.:

While Washington, D.C., has more MinuteClinics than almost any other market in the nation, its massive population means the market ranks ninth in number of clinics per 100,000 individuals. D.C. is in the top quarter of markets for penetration of Aetna plans and ranks 23rd in the Top 100 Most Challenging Places to Live With Asthma. Because CVS Caremark holds the power as the largest pharmacy benefit manager in D.C., any new prescriptions—even those from non-Aetna patients—could be routed through this PBM, creating incentive for MinuteClinics to identify and treat new chronic disease patients.

MinuteClinic affiliations* established with Inova Health in 2011 and MedStar Health in 2014, the No. 1 and No. 2 IDNs by market share, respectively, may help—and may already have helped—facilitate consumer trust in the MinuteClinic brand. Patients who see that the clinic is supervised by physicians from their preferred medical institution, after all, may be more inclined to utilize the services.

Columbus, Ohio:

Columbus, Ohio, falls directly behind D.C. in terms of MinuteClinic penetration and comes in 10th place for market share of Aetna plans; the insurer enrolls just more than 10 percent of Columbus’ population. Here, Aetna maintains both a large commercial and Medicare market and, as in Kansas City, could benefit from attracting seniors to CVS clinics for chronic disease management and preventive screenings.

Because Ohio ranks as one of the least healthy states in the nation (40th place), with a high prevalence of diabetes and cardiovascular disease, the state as a whole could indicate market opportunity for CVS and Aetna. CVS has clinical affiliations* with providers across Ohio, and in Columbus partners with the market’s No. 1 IDN— OhioHealth. As in D.C., this affiliation may facilitate consumer trust in the MinuteClinic brand.

Jacksonville, Florida:

Jacksonville ranks 19th for the highest penetration of MinuteClinics and enrolls roughly 8.2 percent of the market’s population, surpassing Raleigh, N.C., and D.C. The market’s high prevalence of asthma (Jacksonville is ranked 68/100 in the 2018 Asthma Capitals study) and undiagnosed diabetes cases (internal DRG data shows Florida has the highest number of untreated cases nationwide) make the market a strong contender for population health management. CVS has a competitive motivation in Jacksonville to improve patient flow to its clinics; here, competitor Walgreens leases space to Baptist Health System, the dominant IDN.

Atlanta, Georgia:

Atlanta has nearly 40 MinuteClinics, ranking it 23rd in the nation for number of clinics per 100,000 people. Aetna controls nearly 8.5 percent of the population and enrolls a high number of Medicare recipients. Not only does Georgia rank in the bottom half of states for health indicators, but Atlanta contains clusters of counties that suffer from high levels of poverty and premature deaths related to poor health, especially diabetes.

CVS has a clinical affiliation* with the market’s second-largest IDN, nationally-renowned Emory Healthcare. CVS has further incentive in Atlanta to lure the low-acuity population because of main competitor Walgreens, which leased clinics in 2017 to the third-largest IDN in the market, Piedmont Healthcare. More than 100,000 patients visited the Walgreens-Piedmont clinics in the first year.

As indicated, several market dynamics play a role in the CVS-Aetna integration, and any market with a high crossover of clinics and Aetna enrollees is fair game initially (Dallas, Raleigh, and Hartford, Conn., are three additional areas of possible activity). Over time, CVS may choose to target markets like Southern New Jersey or Philadelphia based on high penetration of Aetna enrollees alone and then build out additional MinuteClinics to improve the clinic-to-enrollee ratio. Contact DRG for a custom prediction of the impact the CVS-Aetna merger may have on any of the nation’s largest 87 markets.

*CVS MinuteClinic affiliations (which facilitate the exchange of medical records and patient referrals and pay a stipend to supervising physicians) work best when an IDN’s low-acuity patients (1) visit a MinuteClinic instead of the high-cost emergency room for an urgent need and (2) visit a MinuteClinic for a non-urgent need instead of waiting several days or weeks for a primary-care visit, thereby reducing the likelihood that the patient’s ailment will advance to a higher-cost, more complex illness.  

The relationship between IDNs and CVS stores may change as CVS breaches higher-acuity territory formerly claimed by partnered IDNs. One projection posits an on-site primary-care physician at select times (weekends/after-hours) to see drop-in patients, which would drive patient flow to the CVS stores and help the IDN collect patient data and manage patients’ health. In the era of value-based reimbursements, improving patient outcomes via integrated electronic medical records, disease management, and drug adherence may reap more financial reward for IDNs than submitting high-cost claims to insurers.

Continue reading: Go to Part I or Part II


Michelle La Vone Richardson is a Market Analyst at DRG whose work appears in Health Plan Analysis and Market Overviews. Follow her @mlavoneDRG on Twitter for #retailclinic and #convenientcare updates.

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