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

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

    • How to Find a New Audience After Hitting a Marketing Plateau

      It may sound like a marketer’s dream scenario: efforts have proven to be so successful it appears a company has completely saturated their target audience. While it may be a good problem to have, it still may be a problem. Hitting a marketing plateau is an opportunity for companies in any industry to reevaluate, re-energize and come to the table with new ideas for better understanding existing customers and engaging new audiences.



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


  • Most Popular Stories

    • Gas City Startup Helping Hemp Farmers

      Last month, it became legal for Hoosier farmers to grow hemp and a Gas City-based startup is being aggressive in being among the first to take advantage of market opportunities. Heartland Harvest Processing is helping farmers connect the new agricultural commodity to consumer products, including CBD. Founder and Chief Marketing Officer Chris Moorman says the first hemp harvest under the new law is expected to begin next month. In an interview with Business of Health...

    • IU, Purdue Notch New Enrollment Levels

      Indiana’s two largest state universities are starting the fall semester with a record number of attendees. Indiana University Bloomington says it is welcoming its largest-ever class of first-year students, nearly 8,300 based on preliminary figures.

    • Eleven Fifty is headquartered at Launch Fishers.

      State to Launch 5G Hub in Downtown Indy

      The state of Indiana has announced plans for what it says is a first-of-its-kind 5G hub. Launching in October, the Indiana 5G Zone aims to "attract business, foster innovation and propel research and development in 5G-enabled advanced technologies." The hub will be located inside the new downtown Indianapolis headquarters of the nonprofit Eleven Fifty Academy. The Indiana 5G Zone will include a 3,000-square-foot research lab, which will be used to develop and test...

    • (image courtesy of The Times of Northwest Indiana)

      Crews Start Demolition of Carson's in Hammond

      The face of downtown retail in Hammond is changing once again with the demolition of Carson’s department store, the one-time the anchor of Woodmar Mall. Our partners at The Times of Northwest Indiana report excavating crews have started to demolish the last vestige of the shopping center which stood since the 1950s. 

    • Nationwide, AAA Travel says nearly 47 million Americans will travel at least 50 miles from home.

      Indiana in Bottom Half of Annual Highway Report

      Indiana's highway system needs a lot of work, according to a new study. The Hoosier state ranks 33rd in the nation in condition and overall cost-effectiveness in the Annual Highway Report, published by the California-based Reason Foundation.