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A recent business announcement explains the changing face of health care.
CVS (CVS) and Aetna (AET), the big health insurer, are merging. If the merger is completed, CVS is expected to expand their 1,100 existing Minute Clinics to more of the 9,700 CVS stores. At these clinics, nurses perform vaccinations, simple medical tests, basic medical check-ups, AI analysis of medical data and other medical services. AET’s health and accident insurance will be offered, and claims can be filed. There will be cross selling to Aetna customers to encourage buying their listed pharmaceuticals from CVS.
Over time, the CVS retail location could become a conveniently located medical services office where basic activities, as well as some diagnosis and insurance claims can be processed. Patients can interface with pharmacists, nurses, and other medical and insurance professionals without a visit to a physician.
Currently there is a complex chain of services spanning pharmaceutical companies, pharmacy benefit managers, retail and wholesale pharmaceutical distributors, retailers, and consumers. All of this will eventually be integrated with health and accident insurance, medical services, and behavior, health, and diet consulting.
Stay tuned for further updates as these industries evolve.
Investment implications: The landscape of U.S. healthcare remains in flux. The potential merger between CVS and AET could indicate the deepening of significant changes in the way healthcare is delivered in the U.S., with more healthcare encounters being mediated through retail clinics rather than through traditional physicians’ office visits. For now, we remain neutral on healthcare, pharmaceuticals, and biotechnology, until developments in U.S. healthcare become clearer.
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