CVS Health says that its $69-billion takeover of insurance giant Aetna will be good for consumers. That, of course, is unlikely.
For the deal to benefit consumers, it would have to result in lower drug prices or lower insurance costs. If past mergers are anything to go by, this won't happen.
"You don't need a crystal ball to predict the future here," said David Balto, a healthcare advocate and former policy director for the Federal Trade Commission.
"Mergers like these have a dismal history," he told me. "They lead to less consumer choice and more exclusionary conduct. Consumers suffer by paying more and getting less choice for the vital drugs they need."
We've seen drugstores merge with drugstores, and insurance companies with insurance companies, but this is the first time a drugstore is taking over a health insurer.
Adding another wrinkle, CVS also runs CVS Caremark, a prescription benefit manager that serves as a negotiator on behalf of insurers and employers in securing the lowest possible drug prices from manufacturers and retailers.
If it sounds like all these healthcare enterprises are pulling in different directions, you're right.
Aetna wants to save a buck for its policyholders by driving drug prices down. CVS Caremark wants to help them do that by obtaining rebates from manufacturers, but it wants a portion of those rebates for itself.
Pharmacy operator CVS, meanwhile, wants to sell as many drugs as possible at the highest possible price.
Stir all that together and you get a goulash of conflicting goals and incentives, none of which seem destined to benefit patients.
"I would never underestimate cynicism over a deal such as this," said Joel W. Hay, a USC pharmaceutical economist. "CVS and Aetna have to prove this will benefit anyone but shareholders."
If the merged companies wanted to put patients ahead of profits, however, he said this could be "a golden opportunity for a fully integrated strategy" that uses expanded resources to improve healthcare offerings.
"PBMs and drugstores don't care about patient outcomes — they just want to sell drugs," Hay said. "An insurance company is interested in the outcome. Theoretically, this deal could be a way to put it all together."
That's the way CVS and Aetna are spinning it.
The two companies are envisioning a world where their pooled capabilities mean a complete reinvention of the U.S. healthcare system, with patients enjoying unparalleled access to effective and affordable treatment.
"This is a natural evolution for both companies as they seek to put the consumer at the center of health care delivery," CVS and Aetna said in a statement.
Taking the PR jargon up a level, they declared that the merger represents "a better opportunity to utilize local care solutions in a more integrated fashion with the goal of improving patient outcomes."
I have no idea what that means either. But I do note that CVS now describes itself not as a drugstore chain but as "a company at the forefront of changing the healthcare landscape."
And Aetna is no longer an insurer. It's now "one of the nation's leading diversified healthcare benefits companies."
So this is serious stuff.
To be sure, there could be positive developments. CVS suggested that its network of in-store MinuteClinics could expand in number or functionality. This potentially would allow people to interact with nurse practitioners rather than pricier doctors, thus offering more reasonable care for routine medical issues.
Yet I can't help but think of how banks pitched the advent of ATMs as a boon for customers, allowing them easier and cheaper access to financial networks. Once customers got used to the idea, fees started rising.
The most likely driver for this merger is that CVS wants Aetna's 45 million policyholders, a figure that includes medical, dental and pharmacy coverage.
Balto, the former FTC official, said he expects CVS to either require that Aetna policyholders purchase meds exclusively from CVS, or to offer a modest discount to Aetna members, making it unlikely they'd take their business elsewhere.
That, in turn, would boost overall sales volume, especially among patients with chronic conditions, such as diabetes, who require regular doses of medicine.
Tellingly, CVS and Aetna cited diabetes management in making their case for the deal. They said the expanded company would mean "patients with diabetes will receive care in between doctor visits through face-to-face counseling at a store-based health hub and remote monitoring of key indicators such as blood glucose levels."
"When needed, patients can receive text messages to let them know when their glucose levels deviate from normal ranges," plus other interactions, they said.
CVS Health Chief Executive Larry Merlo said these services reflect the "convenience and coordination" that the merged company can bring to healthcare.
He may be right. Then again, the fine print of the companies' statement acknowledges that these pie-in-the-sky projections hinge on "the ability to achieve the synergies and value creation contemplated."
In other words, who knows?
The only safe bet at this point is that the CVS-Aetna deal, if it wins regulatory approval, almost certainly will prompt Walgreens and Wal-Mart to seek similar tie-ups with insurers.
And then we're looking at an increasingly consolidated healthcare marketplace, with diversified conglomerates trying to lock in patients.
Kind of like the cable industry.
Need I say more?