- Solid growth in the fourth quarter of 2017 and a massive income tax break are allowing CVS Health to invest in more big data analytics technologies ahead of its proposed acquisition of Aetna, the company said in its latest earnings report.
Thanks to growth in the pharmacy benefit management (PBM) market and $1.5 billion in tax benefits resulting from the recent tax reform package, CVS Health accrued $48.8 billion in net revenue during the last three months of 2017.
The growing healthcare company brought in $184.4 billion in net revenue during the whole year.
“Our position in the evolving health care landscape is stronger than ever before, and we remain confident in our model and in our ability to make health care more affordable, more accessible and more effective,” said Larry J. Merlo, President and CEO of CVS Health.
As the company expands its healthcare offerings even further, it will also continue to enhance its data analytics capabilities.
“In addition to debt reduction, the Company is dedicating a portion of the benefits to additional investments in employees, data analytics, care management solutions, and service offering enhancements, a portion of which will be capitalized,” CVS Health explained.
“The impact to the Company’s 2018 consolidated operating profit is expected to be at least $275 million.”
CVS MinuteClinics already rely on electronic health records from Epic Systems, which has cultivated a strong reputation for big data analytics, population health management, and health information exchange.
In October, the two entities announced a strategic partnership aimed at using big data to control prescription costs. CVS Health added Epic’s Healthy Planet population health management tool to its portfolio in an effort to gain visibility into dispensing patterns and patient adherence rates.
"CVS Health is one of the leaders in using data to dissolve domain silos, while offering new sources of intelligence and expertise that can better inform care delivery, reduce administrative overhead, and lower costs for patients," Alan Hutchison, Epic Vice President of Population Health, said at the time.
CVS is planning to take on a larger role in the care of patients with its proposed purchase of Aetna’s health insurance business and accompanying data assets, making a robust analytics and information sharing infrastructure essential for success.
“We enter 2018 with the foundation to propel us to win across all of our businesses. I'm very pleased with the strong PBM selling season we had, with gross client wins of $6.2 billion, and our retail collaborations are expected to drive solid performance in our pharmacies,” said Menlo.
“I’m also pleased with the progress we’ve made in providing superior value for patients, payors, and providers, and we look forward to the opportunities ahead to improve upon our progress.”
Many of those opportunities will center on the $69 billion deal with Aetna, which is being watched with great interest across the sector.
The ability to further integrate pharmacy data with clinical and claims data will give the new entity much more visibility into – and presumably more control over – how patients receive, pay for, and adhere to their prescriptions.
Integrating clinical and pharmacy benefits to create more actionable insights is a high priority for many payers, since the strategy has the potential to save significant sums for payers and employers.
And with new real-time prescription information from pharmacy benefit manager CVS Caremark, prescribers and patients will have even more data at their fingertips to help make sense of rising prescription spending and possible alternatives to high-cost medications.
"Patients often do not find out that the medication they were prescribed is not covered or has higher than expected out-of-pocket costs until they go to the pharmacy to pick up their prescription, which can result in patients not filling a prescription, non-adherence and, ultimately, higher downstream health care costs," said Troyen A. Brennan, MD, Executive Vice President and Chief Medical Officer of CVS Health.
"Making detailed, real-time benefit information available for our PBM members and their health care team, whether it's the doctor or the pharmacist, can help streamline the patient experience and improve health outcomes while also lowering costs for both the patient and the payer.”
Combining this real-time visibility into spending with data assets of CVS Health and Aetna may allow for more effective patient management at a larger scale, especially if CVS is making a concerted effort to implement more analytics tools and technologies to make the most of this new wealth of information.
“With the analytics of Aetna and CVS Health's human touch, we will create a health care platform built around individuals,” Merlo said when announcing the deal to acquire Aetna at the end of 2017.
“We look forward to working with the talented people at Aetna to position the combined company as America's front door to quality health care, integrating more closely the work of doctors, pharmacists, other health care professionals and health benefits companies to create a platform that is easier to use and less expensive for consumers."