Will the CVS Aetna merger serve as an engine for innovation and growth?
How will Rhode Island respond to take advantage of the new disruptive force in the health care industry?
A CVS pharmacy in Woonsocket, home of the corporate headquarters of CVS.
FitBit, in turn, owned the database, responsible for organizing and maintaining the information contained in the database.
One of the dominant players in health IT is Epic, used by Lifespan, Care New England and Partners Healthcare, among others. However, the interface between Epic and FitBit is still in the developmental phase, according to several sources.
One of the many challenges that will face the new merged entity of CVS/Aetna is whether they will need to create a new health IT interface to adapt to the changing market, an expensive proposition, given the current way that the health industry is wired.
In turn, there are some far more nimble health IT systems being developed as population health management analytic tools, including the IT platform at Blackstone Valley Community Health Care, which are focused on community health outcomes, not the sale of products.
PROVIDENCE – There are many critical issues for Rhode Island to consider about the CVS Health purchase of Aetna for $69 billion. Here are some questions to start the conversation and provide some context.
For Aetna and CVS, the proposed merger is part of both a national and global strategy. They are banking on vertical integration to be a major disruptor in how the health care industry is currently organized, financed and delivered.
As with any disruptor, the likely outcomes will have both positive and negative aspects in different industry segments.
What does the merger mean for Rhode Island?
Much has been written about the triumph of a Rhode Island company purchasing a national carrier. But we cannot assume that the new entity will stay in Rhode Island long term.
Rhode Island cannot compete on tax advantages and preferences alone, nor can it rely on loyalty from C-suite leaders with strong Rhode Island ties. That influence may be quickly diluted, as we have seen so many times with businesses that were founded and had their roots in the state and then outgrew us – both physically and intellectually.
What does Rhode Island have to offer a newly merged entity? Will we change the mindset of leaders who look at health care as an expense rather than a growth engine? How can our assets and investments be directed to complement and enhance the national and global reach of both players? How can those efforts be used to increase the speed and breadth of innovation in other Rhode Island health care companies?
In my opinion, the proposed merger represents a moment of truth for Rhode Island. Recognizing and embracing this pivotal moment may well shape the destiny of our state and its citizens.
Rhode Island is well positioned for this growth industry in a new economy, but has never embraced it. It will require a new way of thinking and a new level of leadership to develop a cohesive and compelling strategy to identify our assets and tap into the national reach of a newly merged national entity.
How can Rhode Island leverage the merger and embrace health care as an engine for innovation and growth in the state?
The public statements of both the Aetna and CVS CEOs focus heavily on the potential of the merger to leverage the infrastructure and assets of both companies to build on information technology and consumer-based solutions.
There is a big reason behind this – the global market for health care information technology will reach $280 billion in the next four years. Further, estimates put the consumer-driven, technology- enabled health and wellness market at more than $500 billion, growing at the rate of 25 percent a year.
Cybersecurity, analytics, population health, artificial intelligence, transparency tools and other innovations are exploding in the market.
In my view, leaders in our state have not yet recognized the opportunity that Aetna and CVS are betting on for the future. It will require visionary leaders to make the transition. Is anyone ready to take the leap?
Can our nimbler institutions such as The Rhode Island Foundation and others provide the visionary leadership to help create a strategic statewide approach to highlighting current and future efforts that make Rhode Island a natural feeder for innovative products and solutions for national and global companies?
Can we create a tax and regulatory plan to support a fertile environment for innovative startups and small businesses focused on health care technology and analytic solutions?
Can we use our assets – public as well as private – to highlight and invest in consumer health care solutions? Many of us in the private sector are building transparency and enabling solutions for consumers. Can the Founders League, the Slater Technology Fund, the Social Enterprise Greenhouse and others be convened to develop a cohesive strategy to expand and leverage these efforts?
Can URI’s Health Collaborative be expanded to embrace a broader view?
Can URI, Brown, Bryant and other educational institutions come together to highlight and grow investment in both innovative solutions and talent pools in engineering, pharmacy, analytics and other key areas?
How will we position Rhode Island as a proven laboratory for new approaches in consumer support, delivery reform and integration of data across the spectrum? Now is the time.
Where will the leadership come from?
Christine Ferguson is a frequent contributor to ConvergenceRI.
