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CVS Heath CEO Larry J. Merlo Excited About The Potential Of Aetna Acquisition

merloCVS Health – combined with Aetna – will become “America’s front door to quality health care,” says president and CEO Larry J. Merlo.

The “pharmacy innovation” company’s $69 billion deal for the health care benefits company will integrate more closely the work of doctors, pharmacists, other health care professionals and health benefits companies “to create a platform that is easier to use and less expensive for consumers,” Merlo said when the deal was announced in December.

CVS Pharmacy locations will include space for wellness, clinical and pharmacy services, vision, hearing, nutrition, beauty and medical equipment. An entirely new health services offering available in many locations will function as a community-based health hub dedicated to connecting the pathways needed to improve health and answering patients’ questions about their health conditions, as well as prescription drugs and health coverage.

More personalized health care experience will be delivered by connecting Aetna’s extensive network of providers with greater consumer access through 9,700 CVS Pharmacy locations, 1,100 MinuteClinic walk-in clinics, Omnicare’s senior pharmacy solutions, Coram’s infusion services and 4,000-plus CVS Health nursing professionals providing in-clinic and home-based care.

The entire health care system will also benefit from broader use of data and analytics, leading to improved patient health at substantially lower cost, Merlo said. This will be achieved, for example, by helping patients avoid unnecessary hospital readmissions. Readmission rates can be cut in half if patients have a complete review of their medications after discharge from the hospital to help them manage their care at home. In addition, home devices to monitor activity levels, pulse, and respiratory rates can be used to prevent readmissions.

The combined entity will be able to help address the growing cost of treating chronic diseases in important ways, he said. For example, 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. As a follow up, patients can receive counseling on medication adherence, pick up diabetes-related supplies and engage ancillary services such as counsel on weight loss and programs designed to reverse diabetes through nutrition.

The deal has a real chance of improving how people manage their own health – and costs, Merlo told CNBC’s Squawk Box.

“The health care economy is now $3.5 trillion and continuing to grow at what everyone recognizes as an unsustainable pace,” Merlo said. “We think we have the opportunity here to begin to bend that cost curve, and at the same time help people achieve their best health. You look at chronic disease in this country today, about half of all Americans have at least one of those chronic diseases. It’s accounting for 80% of the health care costs.”

Under Merlo’s leadership, the company has expanded substantially through major acquisitions and organic growth. It’s now the one of the biggest healthcare companies in the country and ranked number seven on the Fortune 500.

The CEO, who changed the company’s name from CVS Caremark to CVS Health, is also noted for transforming the giant pharmacy chain “into the place to go to become healthy,” according to Fortune.

Merlo spearheaded many “bold changes” under this transformation, Fortune writes, including limiting access to opioid painkillers and banning the sale of tobacco products, while at the same time becoming the fastest-growing provider of walk-in clinics.

CVS’ reinvention “evolved” as the company tried to figure out the purpose of its business, Merlo told Fortune.

After he took the top post, the CEO tasked a small group of employees to answer the question, “Who are we?”

“They came up with a purpose. And that purpose was helping people on their path to better health,” Merlo said. “And we used that purpose as our guidepost.”

He’s No. 7 on Chief Executive and RHR International’s CEO1000 Tracker, a ranking of the top 1,000 public/private companies.

Larry J. Merlo, President & CEO, CVS Health

Headquarters: Woonsocket, RI

Age: 61

Education: University of Pittsburgh School of Pharmacy

First joined company: 1990

First positions with company: Senior Vice President of Stores, Executive Vice President – Stores, Executive Vice President of CVS Caremark

Named CEO: 2011


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