CVS Buys Universal American PDP Plan

I guess everyone’s on vacation since I haven’t seen much talking about this deal that was announced at the end of last year – CVS buying Universal American’s PDP plan.  The one post I saw was from someone who didn’t seem to have a clue. 

The reality here is that this is a good deal (IMHO).  I’m not speaking specifically on the price since I haven’t looked the financials, but more from the business strategy.  CVS Caremark has been actively moving forward over the past few years with new management (Per Lofberg and others), organizational changes, big wins (Aetna), success with their plan design, and many other research studies supporting their value proposition. 

Doubling down in one of the big areas of growth from both a population and a reform perspective makes a tons of sense.  Why wouldn’t you?  And, with the Star Ratings creating bonus opportunities, this is the time to jump in and focus on improving your quality metrics to get the bonus. 

[Note: I both work with CVS Caremark and own their stock.]