As CVS Health turns its eye to the continued expansion of its HealthHUB stores, CEO Larry Merlo said the goal is to offer a "surround sound" experience to consumers.
CVS plans to transform 1,500 stores into HealthHUBs over the next two years, after launching the first three stores in Houston in February as a pilot. The updated stores allocate 20% of retail space to health services.
Merlo said on a panel at the annual J.P. Morgan Healthcare Conference in San Francisco on Tuesday that the model is designed with the goal of meeting patients where they live, as CVS operates nearly 10,000 pharmacies across the country, and offering a one-stop-shop for their care needs. MinuteClinics, for example, are staffed by a nurse practitioner who can treat about 80% of what a primary care office can, and CVS brings physicians into the fold through virtual visits.
"It's reducing some of the fragmentation that exists in healthcare today, and it's enabling a more holistic experience," Merlo said.
CVS touted the early success of the Houston stores on its fourth-quarter earnings call, saying they outperform traditional CVS stores in foot traffic, pharmacy script volume, MinuteClinic visits, front store sales and store margin.
Beyond the HealthHUB stores, CVS is growing other consumer-centric programs, such as a care concierge. Within the MinuteClinics themselves, CVS has expanded clinic hours and lab services and provides wellness activities such as yoga or nutrition classes, said Karen Lynch, executive vice president of CVS and president of Aetna.
In addition, MinuteClinic patients are screened for depression, and CVS is eyeing an expansion into telepsychiatry services, Lynch said. Teladoc CEO Jason Gorevic announced at JPM on Monday that it's expanding its relationship with Aetna, for example.
The services aim to enhance the mind-body connection for the patient, Lynch said.
"We feel very good about the touchpoints, the connectivity that we have," Merlo said.
Managing the rise of specialty drug costs
The CVS executives also talked at length about the challenge that the growing number of specialty medications and treatments with eye-popping price tags poses both from a retail pharmacy and pharmacy benefit management perspective. Lynch said Aetna is weighing the best strategies to develop a stop-loss product that can help both the health plan and employer manage the cost.
The challenge becomes, however, monitoring patients who may switch insurance carriers and how that factors into pricing the stop-loss product for plan sponsors.
"That's the calculus that we're trying to understand: How to price for it," Lynch said.
CVS noted other strategies it's testing in a new white paper released this week.