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Sen. Elizabeth Warren urges FTC to review CVS’ Oak Street Health deal



Sen. Elizabeth Warren (D-Mass.) is urging the Federal Trade Commission to scrutinize CVS Health’s planned acquisition of Medicare-focused primary care provider Oak Street Health.

In a letter to FTC Chair Lina Khan and Commissioners Alvaro Bedoya and Rebecca Slaughter, the progressive senator wrote the deal could lower quality of care and hike costs. 

She also pointed to other acquisitions  including UnitedHealth Group’s purchase of home health provider LHC Group, Walgreens’ stake in primary care company VillageMD and its deal with CareCentrix, and Amazon’s acquisition of One Medical – as part of a push toward vertical integration, “creating a few large healthcare conglomerates that control all aspects of patients’ healthcare journeys.”

CVS also owns insurer Aetna and pharmacy benefit manager CVS Caremark. Last year, the company announced plans to buy home health platform Signify Health.

Warren noted the growth of value-based care arrangements has the potential to improve health outcomes and cut costs, but she added a number of healthcare companies see “a significant money-making opportunity,” specifically by acquiring primary care or home health companies that take Medicare Advantage plans. 

“Given the potential risk that vertical integration could lead to higher healthcare prices and lower quality of care, the Federal Trade Commission (FTC) should carefully scrutinize this deal, and others like it, and oppose any healthcare acquisition that would threaten competition, increase prices and reduce quality of care,” Warren wrote in the letter. “The FTC should also retrospectively review similar consummated deals and challenge in court any mergers that have reduced competition in violation of antitrust laws.”

CVS did not respond to a request for comment.

THE LARGER TREND

After weeks of rumors, CVS confirmed it had signed a $10.6 billion deal to purchase Oak Street in early February. It marked another move into the primary care space for a big retailer, which has also seen activity from companies like Walgreens, Walmart and Amazon.

Experts have noted the expansion of retail healthcare could offer patients more access to care, as major retail pharmacies have locations across the U.S. But it’s also necessary for the companies to build trust with patients as primary care providers and set up better care coordination workflows

“I think that there’s a lot of positives to retail players in terms of catering to consumer preferences and providing care in a more convenient way,” Sanjula Jain, senior vice president of market strategy and chief research officer at Trilliant Health, told MobiHealthNews in December. “But for a lot of complex care, acute care – that every American is going to need at some point in their life – there is a little bit more fragmentation.”

Tracy Chu will offer more detail during her HIMSS23 session “Automation Improves Digital Education App Performance.” It is scheduled for Wednesday, April 19 at 11:30 a.m. – 12:30 p.m. CT at the South Building, Level 5, room S505.



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