CVS made an offer to buy Aetna for more than $66 billion. While there may be a lot of value in a combined company’s increase in power in drug distribution, what might this healthcare vertical integration mean for customer experience?
My take: CVS and Aetna have totally different relationships with consumers. One lures in consumers for individual retail transactions and an intermittent set of pharmacy interactions, while the other has an annual contractual relationship that often deals with emotional health situations.
As you can see in the chart below from a number of different Temkin Group research reports, consumers have a much more positive relationship with CVS (see Temkin Experience Ratings and Temkin Loyalty Index). As with most health plans. Aetna has a poor Temkin Experience Ratings, doesn’t have many customers recommending it, haven’t earned a high level of forgiveness, aren’t very trusted, and don’t really want to buy anything else from them.
So what happens to customer relationships if either company takes on attributes of the other?
- Can Aetna learn and apply lessons from CVS’ retail prowess? Probably not. Stronger retail-like capabilities could help elements of consumers’ relationships with Aetna, but it’s unlikely that there would be much of a change given the radical difference in business models.
- Can CVS learn and apply lessons from Aetna’s consumer relationship prowess? Probably not. It’s unclear how Aetna can help CVS better treat consumers given its very poor track record.
If this deal goes through, then it looks like consumer experience will lose out in the short-run. Besides the lack of upside in cross-learning, both organizations will likely become more internally-focussed as they work out all of the elements in aligning their operations.
Does mean that this acquisition would be bad for CX? Probably not.
While the short-term impact is not likely positive, there can definitely be improvements in the future. Given the disconnects and inefficiencies across players in the U.S. healthcare system, combinations like this that vertically integrate the market have the potential for improving CX in the long-run. Here are a few of the places where CX may get a boost:
- More tailored experiences delivered because of better consumer insights coming from applying CVS’ consumer insights capabilities to the combined company’s enlarged consumer dataset.
- More retail clinical offerings by picking off more straightforward consumer health offerings like vaccines.
- More creative pharmacy options by co-development of offerings between CVS and Aetna.
The bottom line: CVS + Aetna may provide longer-term CX benefits.