06 Sep CVS: Healthcare’s Innovation Factory is Just Down the Street
Just five years after rebranding itself as CVS Health, the retail pharmacy chain that first emerged in 1963 as Consumer Value Stores, is on the cusp of becoming the nation’s largest provider of healthcare services. Number 8 among the Fortune 500, CVS is already one of the largest pharmacy chains nationally, with 9,600 stores located in 40 states, the District of Columbia, and Puerto Rico; in fact, they’re located within five miles of where 76% of the US population lives.
Back five years ago, when the company only had 7,700 stores promoting cigarettes behind their checkout counters, CVS took the bold move to stop selling cancer sticks and tobacco products in all of its CVS/pharmacy stores, even anticipating their revenues could take a $2 billion hit. But just eight months later, after launching a national smoking cessation program, states where CVS Health locations held greater than a 15% market share, cigarette pack sales went down a full 1% – five fewer packs per smoker, and 95 million packs overall. Meanwhile, nicotine patch purchases in the same states grew 4%, indicating a positive effect on attempts to quit smoking.
But that was just the beginning of claiming the high ground for CVS Health.
In 2015, the company acquired over 1,600 pharmacies and nearly 80 retail medical clinics from Target, which they added to their organically growing chain of MinuteClinics, which they’d acquired in 2006. Today, with over 1,100 Joint Commission-accredited MinuteClinic locations inside CVS Pharmacy and Target stores in 33 states and the District of Columbia, CVS is the largest provider of retail healthcare in the country.
A couple of years later, in December of 2017, CVS announced their $69 billion agreement to buy health insurer Aetna – which would allow the company to provide a broad range of services to the health plan’s 22 million members, once it was approved. And, although it still required a federal judge’s sign-off on the Justice Department’s antitrust settlement, the deal closed anyway, just shy of a year after it was announced.
Moving into 2019, in January, the company launched a readmission prevention program for Aetna members with cardiovascular disease, scheduling discharged patients with MinuteClinic appointments 14 days after leaving the hospital. In the realm of Social Determinants of Health, later that month, CVS pledged $20 million a year to be spent over the next five years on community health initiatives to improve local access to affordable, quality care; impacting public health challenges; and partnering with local communities.
Later that same month, reports surfaced that CVS is piloting dental services, to help fit folks for invisible braces, with six of its stores providing customers with a 3D scan of their teeth to create invisible braces.
In February, CVS Health opened three concept stores in Houston, called HealthHubs – focusing more on healthcare and less on retail, with a new strategy to offer medical services along with prescription drugs, and other products. These HealthHubs were designed to help customers manage chronic conditions, such as diabetes, hypertension and asthma, and each HealthHub also has an expanded health clinic with a lab for blood testing, and health screening. Later that month, CVS also announced they’d spend $325-350 million on technology to support offering more convenient care.
In March, with their shelves cleared of tobacco products, CVS started selling cannabis-based products in eight states. And, the following month, not to be outdone by Amazon, CVS expanded its same-day prescription delivery service to 6,000 stores.
In May, they reached out to Lehigh Valley Health, in Allentown, PA, to share its EHR data with CVS to help connect patients-pharmacies-physicians-and other health networks. And, later that month, on the M&A front, CVS’s ProCare subsidiary announced the acquisition of Premier’s specialty pharmacy.
In June, just four months after opening the HealthHub pilots in Houston, they were deemed such a success that CVS Health announced plans to open 1,500 more of them by year-end 2021.
The following month, MinuteClinic launched its telehealth program in eight more states through virtual video visits. A week later, it announced the start of clinical trials of HemoCare – a home kidney dialysis device, just in time to respond to the president’s Executive Order encouraging more patients to dialyze at home. On July 23rd, CVS CEO Larry Merlo announced a pilot they’ll run with Aetna members having their knees replaced: a coordinated care pilot will manage pre- and postoperative care for patients through CVS pharmacy locations, an at-home clinical team, and telehealth, all with the objective of reducing hospital readmissions. And the next day, they launched a network to help connect Aetna’s most vulnerable patients to support services in their communities, by collaborating with Unite Us, a social care coordination platform to help Aetna’s Medicaid and dual-eligible members more easily access social services in their communities.
And there’s more!
In August, CVS expanded its CarePass pharmacy loyalty and membership program nationwide. In the same vein as Amazon Prime, CarePass delivers prescriptions to shampoo to members who pay $5 monthly (or $48 a year) for 1 or 2 day product delivery, along with 24/7 access to a pharmacist helpline, and a 20% discount on CVS Health-branded products.
Which brings us to this week: not only is CVS Health celebrating its fifth anniversary. Nearly two years after CVS Health’s acquisition of Aetna was announced, a federal judge just signed off on it, concluding “the proposed settlement is well ‘within the reaches’ of the public interest.”
And that brings us to today, when CVS Health will engage with over five million of us, most of whom have already signed up for CVS’s ExtraCare loyalty card – the country’s largest retail loyalty program. CVS Health considers each of these five million encounters as a chance to help their customers improve their health. And, while many in healthcare are just beginning to treat their patients as “consumers,” CVS has been at it for 56 years. So, no doubt they’ll be announcing another consumer-friendly innovation yet this month.
by Mimi Grant, President, Adaptive Business Leaders (ABL) Organization – Round Tables and Events for CEOs of Healthcare and Technology Companies