In recent months, CVS Health has hinted at expanding its healthcare services beyond the current small clinics and pharmacies. The company’s new CEO, Karen Lynch, disclosed information about the provision of more comprehensive services, including the opening of physical primary care clinics.
In the company’s investor day speech on Thursday-CVS’s first since the pandemic began-she and other company executives detailed plan Combine CVS’s pharmacy, home care, and digital work with primary care.
The benefits of this strategy are twofold: it generates income by providing care, and it may reduce the cost of people covered by its Aetna health plan by managing their care.
Lynch said that the goal is to focus on consumer care while at the same time obtaining a larger proportion of health care expenditures.
CVS has developed a plan to turn its thousands of pharmacies into “health centers” with more space dedicated to clinical services, including its MinuteClinics and health services, such as nutrition courses. Now, it has added a third model, with doctors in primary care centers.
According to a statement, the company will own some of these clinics and operate others through management service organization agreements. A presentation detailing its planIt will also form a nursing team led by doctors, nurse practitioners, nurses and health coaches.
The company also recently tested the provision of mental health services in some of its stores. Lynch said that people will come back four times for follow-up visits.
Integration with pharmacists
CVS Caremark President Alan Lotvin said that pharmacists will also play a role in the patient care team, similar to Walgreens’ plan Cooperation with the primary care company VillageMD.
“Every care center we acquire or build will have a pharmacy,” he said on the Investor Day
When asked whether pharmacists would promote these primary care capabilities to patients, he said that this is more like a “natural evolution” for customers.
“It shows the power of an integrated team. An integrated experience tells you, when you can get what you need here, why do you go elsewhere?”
Technical plan
As part of this comprehensive strategy, technology will also play a central role. Of course, there is also telemedicine, and CVS plans to link it with clinics. For example, so far this year, CVS and Aetna have conducted 15 million telemedicine visits, of which 8 million were for behavioral health.
The company also plans to build more consumer-oriented tools. Reached a partnership with Microsoft. The idea is to schedule appointments, track health indicators, manage prescriptions, and chat with the care team through the same app.
Chief Customer Officer Michelle Peluso said that the platform can push people to take the next best action, such as reminding people to screen or reward them for their steps through CVS’s CarePass membership program.
at the same time, CVS plans to close 900 It accounts for nearly one-tenth of its total number of stores because it focuses on this strategy.
Unanswered question
There are still many details of the CVS plan that need to be sorted out. On the one hand, how will they recruit enough clinical staff to run these projects? This has been a challenge for competitors in the past, and the pandemic will only exacerbate the shortage of medical personnel.
It is unclear how the clinics themselves will be designed, where they will be located, and how many primary care clinics CVS will open in the future.
Repurchase
CVS also shared financial forecasts in its investor presentation. It is estimated that by the end of 2021, its revenue will reach 290.3 billion U.S. dollars, and its adjusted operating income will reach 16.6 billion U.S. dollars, which is at the higher end of its guidance. Next year, it expects revenue of 304 billion to 309 billion U.S. dollars, and adjusted operating income of 16.7 billion to 17.1 billion U.S. dollars.
The company announced plans to repurchase a total of 10 billion U.S. dollars of stock and increase its dividend by 10%. As a result, its stock price rose about 4.5% on Thursday.
Image source: CVS Health
