Business Shifts Likely to Shape Future of Nephrology

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The merger between pharmacy giant CVS and health insurer Aetna is among the latest shake-ups in the healthcare industry that are likely to have ripple effects on nephrologists and patients with kidney diseases. The merger was finalized on November 28, 2018.

For nephrologist Bruce Culleton, MD, vice president of CVS Health, the CVS-Aetna merger offers the prospect of a new care delivery model that better meets patients’ needs.

“We believe this type of consolidation encourages the development of business models that are more patient-centric and more holistic than the current paradigm, which is focused on in-center dialysis care,” Culleton said. “Future models will support chronic kidney disease identification and care, dialysis options education with an emphasis on access to transplantation and home dialysis, and innovation to deliver improved outcomes at lower overall healthcare costs.”

Other experts in nephrology are cautiously optimistic that the merger could lead to new models of care and possibly better care for chronic diseases like hypertension that lead to kidney disease. But they also acknowledge that it is difficult to predict how this unusual merger might affect competition, costs, and quality. Most research to date on consolidation in healthcare has focused on mergers between care providers like hospitals or dialysis providers, which have mixed effects on care quality, access, and cost.

“The economics are less clear about what [the CVS-Aetna merger] will do to things like prices and potentially quality of care, compared to what most economic theory suggests about mergers and consolidations among the same types of organizations like among dialysis providers,” said nephrologist Kevin Erickson, MD, MS, assistant professor of medicine at Baylor College of Medicine in Houston.

Seismic shifts

The Aetna-CVS merger will bring together a large national insurance company with a powerhouse in the pharmacy and retail clinic space. The goal, according to a statement from CVS Health President and Chief Executive Officer Larry J. Mello, is to create a better experience for healthcare consumers by merging Aetna’s data and analytics with CVS frontline care.

It’s also a move to protect CVS’s mail order and pharmacy business lines, noted Janis Orlowski, MD, chief health care officer of the Association of American Medical Colleges. She explained that pharmaceutical manufacturers have been increasingly trying to cut out the middleman in pharmaceutical sales. Additionally, newcomers like online commerce giant Amazon recently launched a home health division that could cut into CVS’s sales of over-the-counter products like aspirin or vitamins. Orlowski predicted that merging with Aetna would allow CVS to capture Aetna’s customers and prevent them from turning to Amazon or other competitors.

“It puts CVS clearly back in that middle because you get your insurance from them, so that’s where you’re going to get your drugs from,” Orlowski said.

It will also give the two companies opportunities to disrupt the pharmaceutical market by determining which drugs they will cover.

“We are going to continue to see disruption,” Orlowski predicted.

Another pending merger between health insurer Cigna and pharmacy benefit manager Express Scripts also aims to leverage the companies’ data to improve care outcomes and customer service, according to a company statement.

But not everyone is convinced of the potential benefits of these complex business arrangements. The American Medical Association asked the US Department of Justice (DOJ) to oppose the CVS-Aetna merger, saying it poses a threat to competition among pharmacy benefit managers, health insurers, retail pharmacies, Medicare Part D plans, and specialty pharmacies. California’s Insurance Commissioner Dave Jones also prevailed on the DOJ to block the move citing the potential for increased prices and decreased quality of care.

“The proposed merger of CVS and Aetna will significantly reduce competition in the pharmacy benefit management and Medicare Part D markets, affecting millions of healthcare consumers throughout the country,” Jones wrote in a statement.

Despite the opposition, the DOJ approved the merger in October with the condition that Aetna must divest from its Medicare Part D prescription drug plans.

New care models

Orlowski predicts that the merged company could offer lower cost insurance plans that will cover primary care, vaccinations, or other low intensity services at CVS clinics. This could lead to more frequent visits to control hypertension, diabetes, or even early stages of kidney disease, she suggested. But she doesn’t anticipate they would take on more advanced kidney care or transplant. Those patients she believes would still be seen in more traditional settings. The new company might, however, have some influence on what drugs are available to patients with transplants who are insured by their plans.

The company could also leverage its huge store of patient data to improve the care its patients receive, for example, by boosting compliance with medications.

“A tremendous advantage that the insurers have, is that they have all kinds of information regarding patients, their drugs, whether they’re compliant with their drugs,” Orlowski said. “Even if they don’t know the diagnosis, they know what drugs you’re taking so they can guess at what your diagnosis is, and as far as healthcare planning, quite frankly, other health providers would really like to have that information.”

Baylor’s Erickson agreed that enhanced monitoring of chronic disease or improved compliance with medications could help patients with early kidney disease.

“If they’re focusing on trying to make it easier to receive prescribed treatments and they succeed at that, I think this really could be something that’s helpful for patients with kidney disease,” he said.

But he noted that many patients with more advanced chronic kidney disease don’t have commercial insurance or are uninsured, until they develop end stage renal disease (ESRD) and become eligible for Medicare’s ESRD program.

“Hopefully, CVS would be able to expand some of these new programs that they’re talking about into other populations, not just those who have Aetna insurance,” Erickson said.

Another potential downside to the trove of data the newly merged company will have is that it might be vulnerable to data breaches that might put patient privacy at risk, Orlowski noted. She also cautioned that while improving care may be part of the company’s mission, their data will also be used to improve their profit margin.

“There’s a dual mission and you always have to worry about the conflict in that dual mission,” she said.

A foray into home dialysis

Prior to the merger, CVS Health announced it was launching a kidney disease care initiative. The initiative will leverage the company’s data to identify patients with CKD earlier, and make home dialysis easier with an experimental device for which the company plans to seek US Food and Drug Administration approval.

“CVS Health is uniquely positioned to build a solution that will enable us to identify and intervene earlier with patients to optimize the management of chronic kidney disease, while at the same time making home dialysis therapies a real option for many more patients,” Culleton said.

Although it is not yet clear what the merged company’s plans are regarding the kidney care initiative, the prospect of new models for early kidney care and better access to home dialysis was welcomed by some observers.

“I’m cautiously excited about these developments,” Erickson said. “We need to find new and better ways to deliver care. We need to find ways to slow the progression of kidney disease to smooth patients’ transitions to dialysis, to promote things like preemptive kidney transplantation and home dialysis modalities. We need to do better at coordinating care for patients who do have ESRD and I think there’s a lot of room for innovative new approaches to achieving these goals.”

He said he hoped the company would not focus strictly on dialysis, but instead work to improve upstream care that delays the onset of ESRD or the need for dialysis.

“It would be great if there was also a focus on trying to keep people from developing ESRD and needing dialysis,” he said.

He also welcomed CVS’s initiative as another potential option for home dialysis.

“Making it more available to patients, efforts to educate patients and make them aware of this option, would be beneficial and could help to get more patients on home dialysis, which I think would be a better choice for some patients,” he said.

Orlowski said that nephrologists in general should revisit the option of home dialysis. She noted that in-center dialysis is predominant in the United States for both business and other technical reasons. But she noted that the machines are becoming smaller, easier to use, and more efficient.

“I think that nephrologists need to re-look at home dialysis and what our opportunities are there,” she said.

She also urged the profession itself to look to develop better ways to deliver care and how best to do that under new alternative payment plans and bundles.

“We need to be working with our healthcare systems on how do we prevent the progression of kidney disease through much earlier management of these diseases,” Orlowski said. “It shouldn’t be only CVS, it should be the healthcare community that says, ‘Let’s stamp out 10% of chronic kidney disease by earlier management.’”

December 2018 (Vol. 10, Number 12)