Examining Potential Side Effects of a CVS/Aetna Merger

Posted: Updated:
Philip Powell is associate dean of academic programs at the Indiana University Kelley School of Business in Indianapolis Philip Powell is associate dean of academic programs at the Indiana University Kelley School of Business in Indianapolis
INDIANAPOLIS -

The private sector and academia are weighing in on a proposed $69 billion merger between CVS Health Corp. (NYSE: CVS) and Aetna Inc. (NYSE: AET). Indianapolis-based OurHealth co-founder and Chief Executive Officer Ben Evans says the deal is characteristic of "this impending collision of insurers and providers," where insurers and health care providers are competing for the patient. Philip Powell is associate dean of academic programs at the Indiana University Kelley School of Business in Indianapolis and he teaches in the Business of Medicine Physician MBA program. He says the planned union of CVS and Aetna is good news for Hoosiers.

"Our health care system is fragmented," Powell tells Inside INdiana Business Multimedia Journalist Mary-Rachel Redman. "You can bring medicine, insurance, and actually, health care delivery under the same roof" with a merger of this magnitude. He calls the deal atypical and believes it "could only be good for Hoosier consumers," because the companies aren't competitors, and thus, will find ways to lower costs. "Our health care system is in need of a lot of disruptive changes," Powell says. "Something has to give and one of the best things that can happen is for different parts of the industries to come together in a new model for how to deliver services. That can only be good for Hoosiers."

Evans says there is plenty of available capital in the space and "chaos," a recipe which he says is opening the doors for big players to take shots at new opportunities in the multi-trillion dollar industry. Twenty percent -- or $3.2 trillion -- of the nation's Gross Domestic Product in 2017, Evans says, goes toward health care. He says the figure is expected to rise to $5.2 trillion by 2025. "There's chaos and chaos breeds opportunity, and you'll see the big players in health care try to leverage that chaos into opportunity," Evans told Inside INdiana Business.

The deal would also include CVS's assumption of some $77 billion in Aetna debt. You can read more about the planned acquisition by clicking here.

  • Perspectives

    • Expand Your Workforce to Include The Deaf Community

      While there are arguably many minority groups that are grossly underutilized in the workforce, I’d wager that most people do not consider the Deaf community when thinking about diversity and inclusion strategies. The Deaf community shares a unique culture that is closely networked, but few employers know how to tap into this community, which comprises 10 percent of the population. In fact, many people probably see barriers for the Deaf community when it comes to employment...

    More

Subscribe

Name:
Company Name:
Email:
Confirm Email:
HTML
INside Edge
Morning Briefing
BigWigs & New Gigs
Life Sciences Indiana
Indiana Connections
INPower
Subscribe
Unsubscribe

Events



  • Most Popular Stories

    • First Office Tenant Locks in at Bottleworks District

      Indianapolis-based High Alpha will be the anchor office tenant of a high-profile development. The $300 million Bottleworks District, which broke ground three months ago, will also include hotel, residential, theater and retail spaces, as well as a food hall. Wisconsin-based Hendricks Commercial Properties LLC Vice President of Development Isaac Bamgbose says a tenant like the tech-focused venture studio and investor will help create more vibrancy and...

    • Italian Company Picks Daleville For Continental HQ

      An Italian filter manufacturer is detailing plans to locate its North American headquarters in Delaware County. Filtrec S.p.A. says it will invest $1.3 million into a Daleville operation that could create 25 jobs by 2022. Governor Eric Holcomb announced the plans along with Delaware County and company officials during an economic development mission to Italy. Initially, Filtrec says it will occupy 5,800 square-feet in Daleville and it intends to double or triple that presence...

    • Cottongim Joins Taft’s Municipal And Legislative Team

      Taft Stettinius & Hollister LLP has added Ann Cottongim as director of municipal and legislative relations. In this role, she will direct the firm's objectives involving local and state government affairs by maintaining and nurturing relationships with municipal, county and state officials. She previously served as deputy director and CFO of Aim (Accelerate Indiana Municipalities, formerly known as Indiana Association of Cities and Towns (IACT)).

    • Salesforce, Pacers Partner on Digital Experience

      Indianapolis-based Pacers Sports & Entertainment Inc. and one of the largest technology industry employers in the state are joining forces to deliver what they say will be the "ultimate fan experience." The partnership with Salesforce.com Inc. (NYSE: CRM) will allow PS&E to connect with fans and concertgoers using email marketing, social media, digital advertising and customer service tools. The collaboration, PS&E and Salesforce say, will help...

    • PGA TOUR Superstore to Open in Indy

      A popular golf retailer will Saturday open its first location in Indiana. The PGA TOUR Superstore location in Indianapolis replaces the recently-closed Babies"R"Us location at the Clearwater Crossing Shopping Center.