In April, CVS Health, CEO Karen Lynch celebrated the acquisition of Oak Street Health, a primary care company specializing in treating Medicare-eligible patients. CVS has been expanding its presence in the healthcare industry by acquiring various companies, including pharmacies, insurance providers, and primary care businesses. This strategy is driven by the goal of delivering comprehensive, convenient, and cost-effective care to patients.

CVS faces competition from other healthcare giants like UnitedHealth Group (UHG), which has built its own health services division called Optum. Optum provides a wide range of healthcare services and has become a significant player in the industry. Both CVS and UHG aim to provide value-based care, which focuses on improving patient outcomes while reducing costs. The ultimate vision is to create a healthcare system where patients receive early and frequent care, leading to better health outcomes and lower healthcare spending.

While the growth of these large healthcare companies has led to increased revenue and dominance in the industry, there are concerns about potential conflicts of interest and the impact on patients. Critics argue that the consolidation of providers, insurers, and pharmacy benefit managers under one roof may harm patients' access to services and increase prices. However, proponents of vertical integration believe that it can lead to more efficient and coordinated care, benefiting underserved populations and preventing costly medical interventions.

The shift towards value-based care is gaining momentum, driven by the need to address the flaws and high costs of the current healthcare system. The aging population and regulatory changes, such as the Affordable Care Act, have further fueled the push for value-based care. Despite its potential benefits, value-based care is still not the norm, with only a fraction of patients currently receiving this type of care.

In conclusion, the growth of large healthcare companies like CVS and UnitedHealth Group represents an attempt to transform the healthcare system by providing comprehensive and cost-effective care. While the benefits of this approach are debated, the industry as a whole is moving towards value-based care with the goal of improving patient outcomes and reducing costs.

 

Full article from Fortune here.

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