As it seeks to boost its financial fortunes, CVS Health has "identified a multiyear opportunity" to generate as much as $2 billion in savings, CEO Karen Lynch told investors Wednesday.
Lynch said on the healthcare giant's earnings call that finding ways to trim costs will allow the company to better invest back in the business and drive financial outperformance.
"These savings will be driven by further streamlining and optimizing our operations and processes, continuing to rationalize our business portfolio and accelerating the use of artificial intelligence and automation across the enterprise as we consolidate and integrate," Lynch said. "We will be thoughtful and deliberate as we execute these actions to ensure we continue to meet consumer needs."
Tom Cowhey, CVS Health's chief financial officer, said on the call that the company expects this work to generate $500 million in adjusted operating earnings next year.
He said CVS is "encouraged" by its push to improve its financial outlook and charge up momentum into 2025 and beyond.
Cowhey said CVS is aiming for double-digit growth and that it will provide further details on progress later this year.
"Those efficiencies are going to allow us to drive results both for shareholders but also invest in our products, processes, infrastructure. We think these are the right things to do," he said. "A lot of them are underway, but we really accelerated our focus on delivering near-term value to help improve our outlook."
CVS slashed its full-year guidance in its second-quarter earnings report as its Aetna unit faces significant challenges with elevated utilization. The performance at Aetna led Lynch and the executive team to oust Aetna President Brian Kane, with Lynch taking a more direct role in the insurer's day-to-day operations.
Lynch said the "financial performance of this business was not meeting my expectations," which drove her to make a change in leadership.
Cowhey said CVS would not parse out where it's expecting to see the $500 million in savings next year nor what specifically might be attributed to Aetna.
"That's all bottom line," he said.