Sarah Morgan

Healthcare Geek.
Professional Communicator.

Healthcare

Will CVS Bring Single-Payer to the US?

TL;DR: Probably not anytime soon, but probably sooner than you think.

Here’s why healthcare won’t change.

Healthcare change won’t come because Big Pharma decides to change. Too many in Big Pharma still secretly hope they’ll wake up and be back in the late 90s – the era of blockbusters, enormous sales forces, minimal promotional regulations, and DTC advertising just hitting its stride. They are too busy wanting to go back to truly want to go forward.

Healthcare change won’t come because we move to a single-payer system. We will, eventually – after all, we’re the “only remaining industrialized country without some form of universal access to medical services.” But it will still be a long time coming.

But here’s why healthcare will change.

Healthcare change, in the US, will come because of capitalism. Because we are a capitalist society, a peculiarly capitalist country in that society, and a peculiarly capitalist industry in that country.

CVS Health just bought Aetna. CVS is the biggest chain pharmacy, and CVS Health is the second largest pharmacy benefit manager. Aetna is the third largest health insurer. Any experiments in this new combined ecosystem will absolutely change the industry.

About 15% of all of the drugstores in the country are CVS. CVS Health processes a billion prescriptions a year for insurance companies. About 7% of all of the people in the country are covered by Aetna. These are big numbers.

By the way, I’m not the only one saying this – Forbes is also noting how the CVS-Aetna deal moves us closer “toward a free-market version of a single-payer-like system.”

Even without our government instituting a single-payer system – and let’s be real, who’s really expecting much of any kind of productive activity from them these days – consolidation is happening.

It has been for decades. Only 40% of pharmacies are independent. Less than a third of doctors practice independently. Hundreds of hospitals merge every year. And with this merger we can see more of what’s ahead. Soon, you’ll be able to have a clinic visit, have your prescription processed, and purchase your prescription all from the same company.

As The Atlantic notes: “The market for drugs is shaped by five different types of companies: drug manufacturers, wholesalers, pharmacies, insurers, and pharmacy benefit managers (which function as middlemen between manufacturers and insurers). …CVS would have a foothold in every category but manufacturing.”

CVS is shoring up against not only their traditional competitors – pharmacies, pharmacy benefit managers, payers – but their newer competitors – clinics, physicians and other providers – as well as the competitors that are waiting in the wings – like Amazon and other tech companies that want in on the lucre of healthcare.

Consolidation works. Sun Tzu knew this two and a half millennia ago: “to win battles and capture lands and cities but to fail to consolidate these achievements is ominous and may be described as a waste of resources and time.”

Change happens all the time, of course, but this is a big one, and we’ll see its repercussions in big ways.

Comments

Be the first to leave a comment.

Leave A Comment

Leave a Reply

Your email address will not be published. Required fields are marked *