The former CEO of Aetna reveals why he thinks Amazon's $750 million PillPack deal isn't really about pills
- The healthcare industry is going through dramatic changes.
- From mega-mergers between pharmacies and insurers, to big tech getting increasingly interested in healthcare through Amazon's acquisition of online pharmacy PillPack, the industry is vying to figure out how to do healthcare cheaper and better.
- Former Aetna CEO Mark Bertolini explains what he thinks the Amazon-PillPack deal is really about.
- "Amazon bought PillPack, but it wasn't about the pills," Bertolini said in an interview.
Mark Bertolini has made some big bets on healthcare in his career.
Bertolini most recently served as CEO of the health insurer Aetna, in which he oversaw the close of Aetna's $70 billion acquisition by CVS Health. The deal redrew the lines of what defines a healthcare company by combining a retail pharmacy and an insurer.
The CVS-Aetna merger is just in the beginning stages of testing out the potential of the combined organization, but Bertolini has a big vision for where the healthcare system is heading. That includes incorporating technology, like teaming up with Apple in a bet that wearing a watch and using an app can keep members healthier.
Business Insider's Richard Feloni spoke with Bertolini in late February, at the CECP's CEO Investor Forum, and ahead of the release of his new memoir, "Mission-Driven Leadership." When talking about the role technology plays, Bertolini explained that technology alone won't lead to structural changes in healthcare.
"Technology can't do it all," Bertolini said. "You need empathy. You need people. You need to place-make, and machines don't do that effectively."
Step two is setting up a concept called a "patient-centered medical home," a model in which primary care is more of a team effort. The idea is that by building health plans that connect the care patients get in emergency situations with the care they get when they leave the hospital, insurers can avoid higher costs that could occur if patients end up back in the hospital again because they weren't getting the right follow-up care or preventive treatments.
Then for the majority of the time you're out in the world, there's an ecosystem in place to support you, Bertolini said.
That's where a company like Amazon could come in. In June 2018, Amazon bought online pharmacy startup PillPack for about $750 million. At the time, the deal sent shockwaves through the healthcare industry as Amazon's playbook for upending healthcare got clearer. From where Bertolini sits, the deal had less to do with running a pharmacy and was more about finding a new way to get into people's homes.
"Amazon bought PillPack, but it wasn't about the pills," Bertolini said. "It was about getting into the home with Alexa where they can learn more about what we can do to provide health."
The way he sees it, there are ways to use technology to improve how we care for patients when they're not at the doctor's office. That could mean providing a ride to the doctor, send them a new walker, and so on. That way, you can collect all the information and find ways to eliminate doctor's visits, opting instead for fewer, longer meetings.
"All of a sudden, we've created an open source, free, patient-centered medical home for that doctor," Bertolini said.
It's something Bertolini envisions health plans like Aetna doing on behalf of doctors.
"Instead of the doctor having to set it up, what we can say to the doctor is, just send 'em to us. We'll create a plan with them that follows up on your suggestions and your orders. We'll make sure that all gets set up for them," he said.
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