As America waits to hear from Washington about the future of health care, CVS Health is one major company that stands to feel a big impact from repealing the Affordable Care Act.
The company has made major changes to its business to focus more on consumer health, including a 2014 decision to stop selling tobacco products. Here & Now's Jeremy Hobson speaks with CEO Larry Merlo about the growing opioid crisis, and other health issues.
On the Affordable Care Act's effectiveness
"I think the Affordable Care Act certainly dealt with making health care more accessible. I think if you look at the uninsured rate, that's probably at its lowest level on record, at between 8 and 9 percent. From a business point of view, the Affordable Care Act did have a modest benefit to our performance through the expansion of Medicaid. At the same time, there's much more that needs to be done to make health care more affordable and more effective."
On whether the law is collapsing
"I think there's certainly a lot going on, and I think the future direction of health care reform, at this point, is squarely in the hands of the Senate. A question that I get is, what would we like to see, and I think it goes back to seeing a bill that provides access to affordable health care for all Americans, and at the same time, one that allows the private sector to do what it does best, and that is to allow for market competition and innovation."
On the Republican health care plan
"I think if you look at health care, some of the facts that continue to be true today, health care spending is increasing too fast — nearly $1 out of every $5 in the country goes towards health care, so clearly there are things that aren't working in our delivery system. We think about three variables that contribute to health care spending, those being quality, access and cost."
"I think there are elements that make sense from the Republican plan, but clearly, there are other elements that the Republican plan does not deal with. I think that there are many open questions that have yet to be answered."
On what it's like to run a major U.S. company amid political uncertainty
"We follow the news carefully, just like you and your listeners, and there are many things that we've heard from President Trump in terms of outlining his agenda, there are things that we're certainly very much aligned with. The need to overhaul our tax code and have a competitive tax rate is of particular interest to us, in addition to some of the health care elements that we were talking about earlier. And the opportunity to bring back jobs to our country. That said, we don't have direct control over that process, and our focus continues to be on putting our patients first, and providing them with convenient access to affordable, quality care."
On whether the Russia investigation will sideline President Trump's agenda
"It's certainly hard to answer that question, I don't think I'm in the best position to answer that, as I certainly don't have control over that process. It remains to be seen as to the pathway of getting those things done. You talk about tax, we were pleased to see the president's proposal to decrease the corporate tax rate to 15 percent. We have worked for several years now in terms of educating policymakers on this particular topic. Today, our tax rate — when you look at federal and state combined — is more than 39 percent. So we pay about 1 percent of all corporate taxes in America, placing us at the very high end of corporate taxpayers. A meaningful reduction of the corporate tax rate would allow CVS Health to invest in growth and innovation, and we think that would be good for our customers, our patients, and good for the economy."
On the impacts of the company's 2014 decision to stop selling tobacco products
"It's a decision that, as we look at nearly three years later now, we're very pleased that we made that decision, which was a tough one at the time. We sold about $2 billion worth of tobacco and related items and, as we were growing as a company, and more of a health care company, we saw the contradiction between delivering health care in the back of the store at the pharmacy, and at the same time, selling tobacco products that is a leading cause of death in this country."
"There was a short-term headwind as a result of that, but as we moved forward, the opportunity to open up new partnerships with, whether it's a health plan, a hospital system, a health system, we have certainly been able to grow our business in other areas that has more than made up for the loss of selling tobacco products."
On a lawsuit filed against the company and others by the Cherokee Nation, and the company's role in addressing the opioid crisis
"That is certainly an area of great concern for us, and it's an epidemic that does not discriminate. It exists in our cities, in the suburbs and across rural America, and there's no single cause to the problem, and the solution is gonna require a multi-prong effort involving many of the health care players, whether it's pharmacy, or physicians, the pharmaceutical industry, insurers, certainly the government. We have been doing many things in this area, the first being prevention through education. Our pharmacists are going out into the community in junior, senior high schools, educating students on the dangers of prescription drug abuse. Today, we've touched over 250,000 students all across the country.
"The second focus is on collection. What we can do in terms of emptying medicine cabinets in homes of unused prescription medications, and working with community leaders and law enforcement, we've been able to remove over 80 metric tons of unused medications in an environmentally safe manner. And then the third is we've been working to partner with states to ensure appropriate access to the opioid overdose reversal medication naloxone."
This article was originally published on May 23, 2017.
This segment aired on May 23, 2017.