CVS Health Driving Change

CVS is attempting to drive change for consumer’s accessing the U.S Healthcare System. Credit Suisse, an international organization, reports in their coverage from CVS, “CVS is a leading pharmacy benefit manager as well as one of the leading national operators of retail pharmacies.”

In late 2018, CVS acquired Aetna, a leader in employer and government sponsored health insurance. CVS hopes the acquisition will in time improve consumer engagement within the healthcare system, enhance health outcomes, and lower healthcare costs.

CVS has several initiatives in place to improve access to care is through their MinuteClinic locations and is piloting the HealthHub pilot in Texas. As of December 31, 2018, CVS operates over 1,100 MinuteClinic locations across 33 states and D.C.  Today, one in two Americans live within ten miles of a MinuteClinic staffed by nurse practitioners and physician assistants to deliver a variety of healthcare services.

Visits paid for by employers, health insurers, or other third parties account for approximately 91 percent of MinuteClinic’s total 2018 revenues. MinuteClinic is collaborating with Pharmacy Services and other segments to help meet the needs of CVS Caremark’s client plan and health plan members by offering programs that can improve member health and lower costs.

When CVS Health acquired Aetna in 2018, the goal was to transform the consumer healthcare experience so the company introduced the HealthHub® (HUB) concept. Today, CVS is piloting three new HUB locations at CVS Pharmacy stores in Houston Texas. The HUB locations offer a broader range of healthcare services, new product categories, digital tools, on-demand health kiosks, plus personalized care.

With the new HUB format, over 20 percent of the store is dedicated to health services, including new durable medical equipment, supplies, new products, and service combinations. In addition, the “Care Concierge” a professional responsible for customer engagement, has been initiated. To date, customers have accepted help from the Care Concierge in more than 95 percent of recorded interactions.

CVS Health provides Learning Tables complete with iPads for customers to explore health and wellness apps as well as to use to shop on the expanded In addition, there are On-Demand Health Kiosks to help customers measure and track their blood pressure, weight, and BMI.

CVS management describes 2019 as a transition year in which the company will integrate completely with recently acquired Aetna. CVS expects to exceed its 2020 target for synergies from the Aetna acquisition.

The company’s pharmacy services segment results are also being affected by a modest 2019 selling season. Unfortunately the 2020 selling season does not seem to be trending any better. CVS has already lost several high profile contracts effective January 2020 including Centene, CareSource, and Health Trust Purchasing Group.

However, research supports CVS’ plans to improve profit outlook in retail by growing revenue through increased script volumes, by lowering fixed and variable costs through automation within its pharmacy fulfillment process, and migrating to a new third-party payer contracting model.

Also, CVS Health has announced a new initiative focused on chronic kidney disease and dialysis. The new program will focus on early identification of kidney disease and expansion of home dialysis. CVS will soon be introducing an innovative new home hemodialysis technology.

CVS Health is going to use an approach focused on early disease identification and patient education, to be followed by the development of the comprehensive home dialysis program for both hemodialysis and peritoneal dialysis.

As part of the home dialysis program, CVS Health will be initiating a pivotal clinical trial to demonstrate the safety and efficacy of a new home hemodialysis device to support their planned FDA submission to obtain market clearance.

For more information and/or to provide feedback, email A.J Rice at (212 325 8134) or Jailendra Singh at at (212-325-8121).


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