Aetna-CVS deal shows strains in insurance-pharmacist relationship

The deal takes the IT and fulfillment sides of such plans away from the insurer and gives them to the pharmacist. But is that the way to maximum profit?

Wellpoint didn't think so. It sold its PBM outright to ExpressScripts last year. Technically, Aetna is keeping its plan, even though it no longer controls its cost or quality.

Some analysts aid the deal saved CVS' quarter, which missed its expected numbers.  Others said it helped make Aetna a buy, even after a big second quarter.

The truth is it depends. Can CVS save money running the drug plan, over what Aetna would have paid running the plan itself?

The answer hinges on whether CVS can push consumers toward lower-cost generics. This would benefit Aetna. One way it's trying to do so is with a new iPhone app that can let consumers manage their prescriptions, know what their drugs do, and know what alternatives they have.

CVS, which runs a chain of drug stores, and Caremark, which has been in the business of PBMs, merged three years ago expecting big savings and more business from their combination. The stock has been basically flat since that time, and is now just $6/share above its late 2008 bottom.

Does such a combination make more sense with health reform passed? Again, analysts don't know. It really depends on execution, whether CVS can create margins for Aetna that will let it undercut rivals in the coming insurance exchanges.

From an IT perspective, control is passing from an insurance system to a payment system. Does that save money, lose money, or is it a wash?

Time will tell. What do you think? Your opinion is probably as good as any of those overpaid guys and gals on the street. Will this help consumers? Will it help CVS? Will it help Aetna?