Early this week came news just about as big as anything the insurance world has seen in the past few years: CVS has agreed to acquire Aetna for $69 billion. Pending approval of the merger, there are several implications to highlight for the benefits industry, specifically as it would affect benefits advisors.
First, this deal makes it even more clear that the battleground in the insurance and health care spaces is distribution. A combined CVS and Aetna prove that the biggest players in their respective spaces (retail / pharmacy and insurance) are willing to bet on reinventing how health care is delivered. They aim to do this by integrating the actual manufacturing of “products” (health care) and how that “product” is distributed (via the nearly 10,000 retail pharmacies CVS currently operates).
It also highlights the importance of insurance companies and benefits advisors having access to data that can inform and shape the way that health care is designed, delivered, and evolved over time. As one of the most omnipresent retail chains in the country, CVS has access to a boatload of data about consumers: not only what prescriptions you take, but also what over-the-counter medicine and other products you buy. Aetna, on the other hand, has the provider relationships and of course, the insurance itself. Those are two massive puzzle pieces that should fit nicely together in order to deliver a more seamless and intelligent health care experience to the consumer.
This merger has important potential ramifications for benefits advisors, who currently own a significant piece of the benefits experience via employee benefits decision-making, purchasing, and management. Given the fact that over 157 million Americans gain access to health insurance plans through their employer, the advisor that delivers those insurance plans is a key component of the status quo. You should take this opportunity to make investments in ways to protect and add value to those relationships.
One way you can do this is to provide a positive and “sticky” benefits experience for employer clients and employees through a benefits marketplace technology platform. While the benefits advising industry has, for the most part, embraced that this sort of technology is here to stay, it’s time to standardize on it and make it the way you do business. This will help you avoid losing business to a competitive, compelling offering that may, for instance, combine the convenience of CVS’ care delivery mechanism with the insurance products offered by Aetna (which, as of this year, is the third biggest provider of health insurance plans in the US).
Health insurance carriers aren’t going anywhere, and will continue to be a vital partner for benefits advisors. But as this potential merger proves, they’re looking for ways to more tightly integrate the products they’re creating with the way those products are delivered and used, and benefits advisors are at risk of being cut out of the equation entirely if they don’t take decisive action.
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