Cvs pharmacy health care

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In our conversations, in fact, she said that working closely with doctors is central to her playbook. But Lynch tells Fortune that in some markets, it will for the first time hire MDs full-time as it rolls out the super-clinics. An example, she says, might be a rural area suffering from a dearth of physicians. In other places, particularly where the supply is more plentiful, Lynch plans to forge strong contractual ties with doctors.

Under MA, the federal government pays a fixed monthly dollar amount to insurers like Aetna that offer the plans to seniors. The insurers attract members by providing such benefits as low or no premiums and co-pays, free dental care, and rides to clinics. Lynch also will introduce innovative arrangements where doctors outsource preventive and routine care to the CVS clinics and telehealth, virtual, and home services.

CVS can conduct the tests and counseling at far lower cost than doctors can in their offices, in part because CVS can use expensive equipment to screen much larger volumes of patients. The template would free doctors to practice using the top skills honed in their training, enabling them to focus on coordinating care among, say, cardiologists, endocrinologists, and urologists for patients with multiple chronic conditions.

Aetna could plow the extra profits into plans that offer better benefits than its competitors, swelling its MA enrollment. It all comes down to repositioning CVS to capture the holy grail in medicine: intervening before something goes wrong. The rub is that to make her plan succeed, Lynch needs to both run at warp speed, and execute superbly.

A multitude of competitors are crowding the space. Besides the challenge from the Walgreens-VillageMD partnership, Walmart currently operates 20 in-store clinics in Georgia, Arkansas, and Illinois, and plans to enter the Florida market next year.

Insurance colossus UnitedHealth Group owns a broad range of primary care providers, including WellMed, a big player based in Texas. It also operates MedExpress urgent care centers in 19 states, and many of its multi-specialty practices under the Optum name also provide primary care. The arms race is especially fierce in Medicare Advantage. Plus, the rival clinics benefit from having doctors on-site, and CVS is just beginning to establish partnerships with primary care practices. Lynch acknowledges that such outfits as Oak Street and ChenMed are already successfully delivering a menu of services to seniors.

But she insists CVS has the edge. CVS sits on three big legs. The second: pharmacy services, the Caremark pharmacy benefit management PBM unit that administers pharmaceutical plans for companies and insurers. The third is health care benefits, the Aetna insurance franchise that establishes and oversees medical plans for corporations, a role that encompasses securing the networks of physicians and hospitals where employees are treated. Until recently, its prescription business was highly profitable because new generics were rapidly replacing high-price branded drugs, and the margins on those newcomers were extremely rich.

Today, the flow of new generics has slowed dramatically, and insurers are fighting the rising prices of expensive, branded drugs by curbing reimbursements to the pharmacies.

The stiff competition is putting a tight cap on fees and margins. The goal is building the fast-growing health services side that not only generates the best returns, but also feeds the other businesses. The more patients get their preventive care at a HealthHUB or super-clinic, the more prescriptions the pharmacy will fill, and the more merchandise folks will buy.

Overall, sales and profits are also advancing steadily. Ashtyn Evans of Edward Jones has a hold rating on the stock. Because of the complexity, the road ahead could be difficult.

To an unusual degree for such a huge enterprise, the future of CVS is riding on the shoulders of its leader. After starting her career as a CPA, auditing health insurers, she showed her mettle at Aetna by successfully integrating its giant acquisition of fellow insurer Coventry and growing the Medicare Advantage book, then headed the campaign to merge the Aetna and CVS businesses.

Lynch found that primary care doctors often simply prescribe antidepressants or other medications to mental health sufferers. Patients can either see the therapists in a counseling room at a HealthHUB or hold a virtual session. Lynch plans to expand the service to hundreds of locations starting next year.

The CEO is always available to encourage employees suffering from dark episodes. Piper seems to spread a circle of calm in the Lynch household. The pandemic readied America for a new kind of health care that puts consumers first.

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