Changes in the Healthcare Value Chain – How Will it Affect Patients?

There are changes being brought because of the partnerships and mergers in the healthcare value chain- what are the threats and opportunities for patients?

The below post is an excerpt from our white paper Beyond the PBM: A New Order for Healthcare Delivery

In recent months, there has been rapid transformation and stakeholder role expansion within the modern-day healthcare industry.



These consolidations and new partnerships have sweeping effects for all of healthcare’s stakeholders, particularly patients. For example, in the case of CVS’ potential merger with Aetna, combining the reach and convenience of CVS’ mammoth retail pharmacy footprint with Aetna’s increasingly data-driven health management capabilities, the combined company can deliver a superior customer experience at lower cost to patients and payers alike. In announcing the deal, CVS Health CEO Larry Merlo pledged to “create a healthcare platform built around individuals… [that is] easier to use and less expensive for consumers.

What’s the potential upside for patients?

A better customer experiences

American patients must navigate an oftentimes mind-boggling maze of appointments, referrals, prior authorizations and claims denials to access care. Companies like CVS envision paring back the barriers and veto points while making use of digital technologies to provide patients a smoother path to care and to deepen engagement.

Delivering on the promise of connected care

CVS is counting on a bundle of emerging technologies, from health trackers to telemedicine and remote monitoring, to connect patients to providers and fill in the gaps between visits. The soup-to-nuts, vertically-integrated healthcare behemoths that CVS and other players are assembling could use these technologies to extend the patient relationship from a series of discrete touchpoints to a semi-automated, AI-enabled continuous feedback loop.

However, while the component technologies of digital medicine are coming online, many are not yet mature, and assembling them into functioning systems will take time – along with plenty of trial-and-error iteration.

Are there any potential downsides?


Fewer players could mean fewer choices, higher prices

Achieving greater scale and cutting out middlemen should allow companies like CVS Health to cut medication costs in the short term, as they’ll enjoy greater leverage over the drug and device companies across the table and can realize efficiencies when they control the point of care, the means of distribution and the purse strings.

U.S. healthcare consumers could use the help – 62% expect their healthcare costs to increase over the next two years (Source: Cybercitizen Health 2017). However, it remains to be seen how much of the savings will be passed on to the consumer. The knock on traditional PBMs has been that they pocket the discounts they negotiate with drug companies. And increasing costs will compel payers to use narrower networks, more restrictive formularies and higher deductibles. No wonder 2 in 5 U.S. online adults are concerned that they won’t be able to see their preferred doctor due to changes in their insurance (Source: Cybercitizen Health 2017).

More convenience, but at the risk of chaos

CVS hopes to make healthcare more efficient by steering patients away from the ER and into its retail pharmacy stores and urgent care clinics, from which they initiate a virtual consult with a nurse practitioner or physician. For the parent tending to a bad scrape or a persistent cough, no-wait, walk-in service a short drive away is a real plus.

There is substantial consumer demand for one stop shopping in healthcare, with 42% of U.S. online adults saying that getting most of their healthcare needs taken care of in one facility is of utmost importance to a good patient experience (and another 37% citing no-wait service). The downside of a health system with many overlapping points of care is the potential interoperability SNAFUs which may trump the convenience factor. Greater competition and the availability of many avenues for care could spur healthcare companies to innovate and improve the user experience all around, EHRs are not sufficiently interconnected, it’s a recipe for mayhem.

Download the full report to learn more about the transformation of the healthcare commercial model and the connected implications for pharma, payer, providers, and patients.