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CVS Health’s Merlo outlines Aetna integration plans

BY Sandra Levy

CVS Health’s acquisition of Aetna is nearly complete. With Department of Justice clearance secured for the deal — conditional on Aetna divesting its standalone Medicare Part D prescription drug plan business to WellCare at the transaction’s close — it now only lacks five state approvals (out of 28) and is expected to close by Thanksgiving.

As a result, CVS Health president and CEO Larry Merlo told investors on a call accompanying the company’s third-quarter operating results that his focus is on the impending integration with the health insurer, with a long-term focus on substantial medical cost reductions, increased revenues through membership growth, increased customer satisfaction and retention, customer value expansion through CVS Health assets, and growth enabled by an open platform model.

Merlo said that CVS Health and Aetna’s integration and innovation teams’ immediate priorities in preparing for the close fall into two broad categories — successfully delivering on a stated goal of achieving $750 million in year-two synergies and executing on the foundational pieces of its new healthcare model to achieve longer-term growth.

“Our year-two synergy plan is largely complete, and we’re ready to begin implementation upon closing,” he said. “At the same time, we’ve developed a foundational plan that will benefit post-close from a deeper dive into Aetna’s strategies and operations, leading to longer-term value creation.”

He said that central to realizing these synergies will be reducing the company’s corporate expenses, integrating operations and focusing on reducing medical costs.

“We plan to accomplish [the medical cost reduction] through actions that increase adherence to prescription regimens and close gaps in care, along with programs that optimize the site of care either to reduce unnecessary emergency room visits or move expensive therapies, such as infusion to lower-cost sites of care.”

Merlo said the longer-term medical cost savings will come from new programs that are possible through the combination and close integration of the two companies.

Substantial savings also are expected to be achieved through a specific portfolio of such products and services as the better management of diabetes, cardiovascular disease, hypertension, asthma and behavioral health, he said.

“We’ll accomplish this by building upon our near-term medical cost savings through the tighter integration of pharmacy and medical claims, the rich clinical data set we will have, along with our community assets,” he said. “Another example is the optimization and extension of primary care, by expanding the scope of services available at MinuteClinic to help with the early identification and ongoing management of chronic disease.

Merlo said he envisions that substantial savings also will be derived from programs and services that reduce avoidable hospital readmissions by joining Aetna’s clinical programs with the CVS Health’s community presence to better support patients during and after hospital discharge.

The development of comprehensive programs to better manage such chronic diseases as kidney disease, where the goal is to reduce hospitalizations and delay the progression of the disease, and oncology — where the objective is to align provider incentives to focus on quality and outcomes, while enhancing patient support — are also expected to result in cost savings, he said.

Pointing out that solutions will be accessible through a broad range of channels from local community-based assets to virtual and digital solutions that are all coordinated across the member’s journey, Merlo said these solutions will be available to Aetna clients and their members, as well as to healthcare partners the company works with.

Concept stores that will play a key role in offering accessible, personalized care will be operational early next year, and programs and services will be piloted at these stores so they can be rolled out nationally, he said.

“Remaking the consumer experience will be an increasingly important competitive differentiator, and we are hard at work creating a plan to differentiate CVS Health in these patient journeys with the goal of making them simpler and more personalized, while making care more accessible,” Merlo said.

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Holiday retail sales to cross a major threshold

BY Marianne Wilson

Holiday retail sales are poised to cross a major threshold this year, fueled by low unemployment, income growth, high consumer confidence and a favorable calendar.

Total retail sales in the United States will increase by 5.8% to $1.002 trillion, according to eMarketer, which raised its projections from its earlier forecast. It is the first time holiday sales will cross the $1 trillion mark, with 2018 showing the strongest growth since 2011. Spending momentum will get an added boost from a favorable holiday calendar that features the maximum 32 days between Thanksgiving and Christmas.

Brick-and-mortar sales for the holiday season will jump 4.4% to $878.38 billion (higher than the $863 billion that eMarketer previously had projected). Brick-and-mortar still represents the majority (87.7%) of holiday sales, although its share has steadily declined in recent years.

“While e-commerce will continue to see strong double-digit gains, brick-and-mortar retail should be a particular bright spot this holiday season,” said Andrew Lipsman, principal analyst at eMarketer. “Retailers are luring in shoppers with remodeled stores, streamlined checkout and options to buy online, pick up in-store.”

E-commerce sales this holiday season will increase by 16.6% to $123.73 billion, according to eMarketer, representing 12.3% of all holiday retail sales this year.

“For retailers, it will be a battle for e-commerce market share,” said eMarketer forecasting analyst Cindy Liu. “We should expect more promotions and perks like free and fast shipping, as retailers compete against Amazon.”

Holiday sales via tablets and smartphones are also growing, representing 43.8% of e-commerce this year, equate- to 5.4% of total holiday sales.

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Walmart’s mobile barcode scanner to go the augmented reality route

BY Deena M. Amato-McCoy

Walmart’s mobile app barcode scanner just got a makeover.

Realizing that most shoppers currently use the app’s barcode scanner as a price checker, members of Walmart Labs began evaluating how to improve this technology. The answer was to create an augmented reality (AR)-based scanner that would help customers more time, and possibly money.

Using Apple’s AR platform ARKit, Walmart Labs created an AR barcode scanner that loads products faster, and makes it easier to compare products by more than just price, according to Walmart Labs’ “Tech Blog.”

Here’s how it works: Walmart iOS app users can open the scanner by tapping the barcode icon in the search bar. Once the scanner has loaded, users tap the AR icon in the navigation bar to launch the AR scanner.

The scanner applies “anchor dots” to scanned items. As users pan their phone between previously scanned products, the bottom product tile updates based on which anchor dot the scanner is pointing at. If users look at a row of products, the price of the product located at the center of the screen is updated, and also features product reviews.

The technology is already reducing the time it takes to scan multiple items by an average of 50%, according to said Tim Sears, senior engineering manager, Walmart Labs.

“When a customer launches the scanner, they get a direct connection between the digital and the physical world that their screen and camera lens creates for them,” said Sears. “We have a big vision for the future of scanning with augmented reality, and we’re excited to be taking this first step towards many exciting things to come.”

The AR Scanner, which is available on an opt-in basis, is currently available for the iPhone 6s and newer devices.

This is not Walmart’s first try at AR technology. In June, the discount giant began testing a 3D virtual shopping tour, a service that enables customers to virtually browse a curated apartment. The service features nearly 70 items from both national brands and Walmart’s private label offerings.

The new solution coincided with Walmart’s new digital home furnishings shopping experience — one of many elements featured on Walmart’s redesigned website, which was introduced in February.

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