Last summer, CVS and Mass General Brigham announced a partnership aimed at expanding access to primary care. However, a state regulator has cautioned that not only is this outcome far from guaranteed, but the transaction could also increase healthcare expenditures for residents by tens of millions of dollars annually.
The agreement intends to integrate clinicians and care pathways from Mass General into 37 CVS MinuteClinics across Massachusetts, directing patients to the broader health system network for follow-up care. The partners filed paperwork last June to initiate the integration, and the Massachusetts Health Policy Commission began reviewing the proposed agreement last fall.
A report released this month by the state agency estimates that the partnership could lead to an increase in costs by approximately $40 million per year. This rise in expenditures is attributed primarily to the influx of new patients seeking primary care within the more expensive Mass General system, as well as the repricing of routine convenience care at higher rates.
Healthcare economists remain uncertain whether the agreement will truly broaden access to care or merely shift utilization to a more expensive system, thereby escalating overall spending as well as costs for patients and employers.
Breaking Down the $40 Million Estimate
The Massachusetts Health Policy Commission highlighted three key dynamics behind its $40 million estimate, with the first being expenditures for new primary care patients. Essentially, individuals who were not previously patients of Mass General will seek primary care at MinuteClinics and be charged at the higher rates of the health system. Following their visits, these patients might then be referred to some of Mass General’s costliest specialists and hospitals. Based on its analysis of spending trends among typically low-complexity new primary care patients within the Mass General network, the Commission anticipates an increase in costs from these new patients of approximately $27.7 million per year.
The report notes that Mass General’s average prices are 129% higher than those of its competitors. This brings us to the second dynamic to monitor: the repricing of simple services. Convenience care—such as treatment for minor infections or the provision of routine vaccinations—delivered by MinuteClinics would be repriced at Mass General rates, adding an additional $6.6 million annually to commercial expenditures, according to the Massachusetts Health Policy Commission.
The agency also projects an extra $5.9 million in spending due to the diversion of some patients seeking convenience care to other providers. As MinuteClinics focus more on developing primary care capabilities, they will likely scale back their capacity for convenience care, leading some patients who would have otherwise sought care at CVS to seek treatment from other, typically more expensive, providers, the report emphasizes.
Moreover, the overall $40 million figure serves as a conservative projection: it assumes that the new clinics will only utilize about 35% of their capacity by the third year, with costs potentially escalating if adoption increases.
If the MinuteClinics fully transition into comprehensive primary care offices, the report estimates that total spending could soar to $76.2 million per year from standard billed visits and referrals—along with an additional $16 million from other payments insurers make outside of individual doctor visits, such as for care coordination or certain program payments.
Even if the MinuteClinics fail to expand their primary care services and continue offering solely convenience care, the Massachusetts Health Policy Commission still foresees an annual increase in commercial spending of about $12 million since these services would be billed at Mass General’s higher rates.
Mass General holds the highest prices in the state not only for primary care but also for all health services, according to the report.
Statements from Mass General and CVS
In response, the health system expressed concern over the methodology employed by the Massachusetts Health Policy Commission, stating that the report did not take into account the long-term reduction in overall care costs that typically follows from preventive and coordinated care efforts.
“This affiliation aims to expand access to convenient, high-quality care for patients, including in regions facing provider shortages and high rates of avoidable emergency service utilization. Our approach seeks to ensure that more residents, particularly those who have struggled to access care, can benefit from the proven value of primary care in improving health outcomes and reducing avoidable costs,” Mass General stated in an email.
In a separate statement, CVS noted that the report appears to overestimate the potential impact on healthcare spending while neglecting the fact that expanded access to primary care may reduce overall healthcare costs over time.
“This context is particularly important in Massachusetts, where several state reports have highlighted that long wait times for primary care appointments and overutilization of emergency services suggest that better access could help redirect care to more appropriate and less costly settings,” CVS said in its statement.
Both organizations noted their commitment to continuing collaboration with regulators until the state reaches a final decision on the approval of the agreement.
Will Access Truly Improve?
Numerous factors impact healthcare costs, including the appropriateness of care and the use of preventive services. Therefore, there is some truth to the assertion that expanding access to care through an expensive healthcare system could still reduce costs—provided that patients receive better treatment for chronic illnesses and avoid hospital visits, according to Miriam Straus, associate director at Georgetown University’s O’Neill Institute for National and Global Health Law.
However, she believes that the savings resulting from the primary care expansion of the partnership would likely be modest.
“Indeed, the health savings achieved through expanded primary care are most significant among high-risk patients, such as those with chronic diseases. Conversely, patients at the new MinuteClinic primary care services are likely to be in better overall health,” Straus noted.
Another health policy expert—Cheryl Damberg, director of the RAND Center of Excellence on Health System Performance—also expressed doubts about whether the agreement can genuinely improve health outcomes or yield net savings.
Theoretically, better access to primary care could decrease delays in treatment and lead to improved chronic disease management. However, the evidence remains inconsistent, and it is unclear if this benefit would materialize within the context of this partnership, she remarked.
Damberg emphasized that MinuteClinics have traditionally served a wide array of patients without appointments, but this partnership redirects them toward a more commercially insured group, many of whom are enrolled in high-deductible plans and still face access barriers due to elevated costs.
This shift does not expand access to populations that are most likely to encounter care gaps, such as Medicaid recipients or the uninsured, according to Damberg. Instead, it reallocates care for already insured patients within a more costly delivery system—making it difficult to consider the partnership a win for broad access expansion, although it may enhance convenience for some commercially insured patients.
“There is a pivot towards servicing the commercial population. They now have health insurance, but they may be in high-deductible plans, meaning they could still encounter barriers to primary and specialty care access. It’s not as if you’re bringing in Medicaid patients and throwing more money at providers who would then decide to accept them,” Damberg stated.
The net effect would likely be an improvement in convenience for certain patients, rather than a widespread increase in access for all patients.
The Market Power Game
A policy researcher doubts that the agreement can genuinely increase primary care capacity. John Romley, a senior researcher at the USC Schaeffer Center for Health Policy and Economics, asserted that unless Mass General significantly increases its primary care clinician workforce, care will mainly be redistributed rather than expanded.
“Could CVS, as part of this relationship, deploy more MinuteClinics in the MGB service area? It’s possible, and that would be a game-changer,” he stated. “However, it’s equally possible that you’re simply changing who receives what care, and the total amount of primary care provided—to everyone—doesn’t increase significantly.”
For Romley, however, the greater concern is market power.
The Massachusetts Health Policy Commission’s report noted that integrating MinuteClinics into the Mass General network could likely amplify the health system’s bargaining power, sufficient enough to allow it to further raise service prices. However, quantifying such a change in negotiating leverage at this stage is challenging.
Mass General already wields considerable market power in Massachusetts, being the largest health system and employer in the state. Regulators worry that the partnership could enhance its negotiating leverage with payers in a way that elevates prices statewide.
Romley also highlighted that the agreement may have indirect effects on competition in the marketplace, which are challenging to quantify but potentially impactful. For example, because CVS also owns the payer Aetna and pharmacy benefit manager Caremark, there could be competitive spillover effects that weaken price competition.
To put it simply, CVS’s intertwined ecosystem—spanning insurance, care delivery, and pharmacy—could diminish competitive pressure on prices and strengthen its own negotiating position in ways that may drive up costs. Even if CVS does not directly set clinic prices, the company can influence how care is directed and reimbursed, subsequently affecting how Mass General’s costlier services are utilized and compensated.
Fundamentally, CVS could facilitate the flow of patients into the Mass General system, and its integrated payer/pharmacy benefit manager role would likely reduce competitive friction in negotiations—thereby potentially allowing for the maintenance or propagation of higher prices, Romley asserted.
He noted that it is impossible to gauge how much this enhanced negotiating power could raise prices, given that data on contractual negotiations are notoriously hard to obtain. Nonetheless, he believes the agreement raises valid concerns about upward pressure on pricing.
Since the agreement will mainly affect individuals with employer-sponsored commercial insurance, Romley expects that the increased costs will largely be indirectly passed on to Massachusetts workers.
“What isn’t paid out of pocket gets recouped in the form of lower wages for workers. While this isn’t obvious and is quite indirect, ultimately, someone has to pay for it. In this context, it will likely, to a large extent, be those workers covered by employers,” Romley explained.
A Potentially Huge Case Study
The story of retail health clinics in the United States has not been particularly bright. Major retailers like CVS, Walgreens, and Walmart heavily invested in the expansion of these care models a few years ago but have since had to withdraw amidst struggles to integrate them into full primary care systems.
There is little real evidence on what happens when these outlets are repurposed beyond low-acuity care. Real-world data on the performance of retail clinics when integrated into a major medical center and used as an entry point into a broader healthcare system is scarce, Romley noted.
It remains possible that the agreement may not receive approval. The Massachusetts Health Policy Commission, or potentially the state’s Attorney General, could block the transaction if they conclude it would increase costs or harm competition. However, if the agreement does move forward, Romley anticipates it will likely become a closely monitored case study to determine whether vertical integration between retailers and dominant health systems truly broadens access or merely reshapes where and at what cost care is delivered.
If finalized, the partnership could provide one of the clearest tests to date regarding how retail clinics function when fully integrated into a larger health system network.
Photo: pixel wild, Getty Images
