The CVS Health Corp. acquired Aetna Inc. at an approximated cost of $70 billion. The acquisition means that the CVS will have full autonomy of Aetna. The primary goal for the purchase is to provide a better consumer experience and curb the ever-increasing health costs. The key issue the combined company faces is bringing together the different health assets of the two companies. These include Aetna’s employer insurance, the Medicare and Medicaid managed care businesses; and CVS’s large network of pharmacies. The two industries have already established themselves, but they need to come up with proper ways of using the new business set up as an avenue for greater medical research and better services.
The new CVC Company plans to introduce measures and strategies to provide improved services to the consumers. According to the CEO, the new CVS will develop its services to meet with the current health care demands. For instance, it plans to open a reasonable number of new pilot stores in the country by April 2019. The new pilot stores will be used to evaluate the effectiveness of the services provided by the combined firm and come up with recommendations on how to improve services in case of any weaknesses or opportunities. Other changes that the new CVS wishes to implement include; upgrading the company’s CVS MinuteClinics version to a new one, and focus on helping patients with diet and nutritional problems by guiding them into understanding the various health plans offered by the new firm. The idea to promote the diet and nutrition of the patients is good since most people in the country are obese or follow an unhealthy food which has caused them to develop other diseases such s depression, high blood pressure, and cardiovascular illnesses.
It is good to know that the company will be very focused on providing specialized services and products to consumers. The management of CVS has revealed that the firm will majorly focus on the better control of the five common chronic illnesses in the United States namely: behavioral health, asthma, cardiovascular diseases, diabetes, and high blood pressure. The focus on these diseases is good news for patients and those individuals at risk of developing them in the future. The significant advantage of an acquisition, in this case, is that the combined company will save a substantial amount of money, about $750 million by the year 2020 because there will be a reduction in the corporate expenditure, integration costs, and cuts to the various medical services. To achieve a cut in the medical cost, CVS plans to encourage the patients to adhere to medical prescriptions such as completing their dosage and taking the right medicines. Besides, the firm will refer the patients to lower cost medicine sites. So, there will be a decrease in the number of patients using the emergency rooms, and those patients in need of specific therapies such as drug infusion, or hospitalization.
It is surprising to know that despite the two companies having different business models and approaches, CVS was willing to go ahead with the acquisition. I believe that big businesses need to embrace competition as it motivates them to be better than their competitors. But, it is also necessary to have such business ventures to promote excellence although more research and insight has to be done to prevent problems in the future due to lack of integration. Most companies that have merged or undergone acquisition find it difficult to integrate their business operations, and this has affected their profitability or ability to work together without legal issues. The author echoes the sentiments of analysts who feel that CVS faces a challenge in uniting the two companies. This is so given that the two are complicated and they have not always considered making a change as far as the healthcare system is concerned. The major question one asks following the acquisition is how the two healthcare giants will manage to work together. However, the CEO of CVS had disclosed that before the completion of the acquisition deal, the two companies had been working together and tried to integrate their operations. The acquisition plan took about a year, and this might have provided the two firms an opportunity to earn their business strategies and how to ensure a harmonious relationship. Moreover, CVS is not new to mergers, and it has managed, and for that reason, they might be able to work well.
I already knew that after the acquisition, CVS would have significant shares and the highest authority. On the same note, CVS has taken over all the business activities of Aetna Inc. and the latter cannot be termed as an independent firm anymore, because its name has not been included in the new CVC Company. Also, a merger or acquisition implies that the new company will strive to offer improved and quality products and services.
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