WASHINGTON, D.C.—CVS Health continues to invest heavily in healthcare delivery services with a focus on affordability, convenience and better access to primary care.
"What we're fundamentally trying to do is build that world of health around every American," Sree Chaguturu, M.D., CVS Health's executive vice president and chief medical officer, said Thursday at the thINc360 - The Healthcare Innovation Congress.
"We do that through our components of CVS Pharmacy, where we have nearly 10,000 locations and 85% of Americans are within five miles, so we're locally embedded into the communities. That's important as we think about that ability to engage with healthcare on a national scale, but locally delivered," Chaguturu said.
He added, "To have a national scale of locally delivered healthcare system is really important and pharmacy is the most frequent interaction in healthcare. We have five million people engaging and coming into a CVS Pharmacy every single day. That gives us an incredible opportunity to engage, and pharmacists are one of the most trusted individuals in healthcare," he said.
The company operates nearly 10,000 drugstore locations across the country and more than 1,100 MinuteClinics. CVS also is the parent company of major health insurer Aetna, which has 25 million members, and pharmacy benefit manager CVS Caremark.
The healthcare company has been investing heavily in building out its care delivery business.
CVS spent nearly $20 billion to pick up Signify Health and Oak Street Health last year. It then rebranded its health services business to "CVS Healthspire" as it plots its long-term growth strategy. Healthspire encompasses CVS' pharmacy services business, its care delivery assets, including home health company Signify Health and Medicare-focused primary care player Oak Street Health, as well as its new Cordavis operation, CEO Karen Lynch said during the Forbes Healthcare Summit in New York City back in December.
CVS' healthcare services division also includes more than 1,100 MinuteClinics and its accountable care solutions, Chaguturu said Thursday.
The company has evolved its MinuteClinic in-store clinic services from acute care services to nearly 100 services that range from chronic disease management, preventative services and acute care services, he noted.
CVS closed its $10.6 billion acquisition of Oak Street Health in May 2023. That deal came less than two months after CVS finalized its $8 billion acquisition of Signify Health.
Through Signify, CVS provides 2 million home visits annually. "Ten thousand clinicians are providing assessments in the home and allowing us connect those individuals back into the healthcare ecosystem as we uncover the risks and care gaps that they have," Chaguturu said.
Back in August 2022, Lynch said CVS was looking to enhance its health services in provider enablement, home health and primary care.
CVS' acquisition of Signify Health checks the first two boxes while Oak Street Health checks the third one.
Oak Street Health now operates 200 centers in 25 states and employs about 900 providers, according to updated data provided by CVS. The company plans to increase the number of health centers by another “50 to 60” in 2024, Forbes reported in August. CVS said in February it planned to nearly double the business to 300 clinics by 2026 and aimed to grow the number of Oak Street patients over time, Reuters reported.
"We continue to invest in Oak Street and scale that primary care model, again, to solve the primary care crisis that we see, especially for seniors," Chaguturu said.
"Primary care has evolved substantially. If you think about the old days of primary care it was based on this doctor-to-patient relationship. It's evolved into this team-based care. Oak Street is a team-based care model that's focused on complex chronic patients who are over 65. In that model, we have doctors, nurses, therapists and pharmacists as a team that allows us to engage with patients in a much more intensive manner, focused on Medicare Advantage and dual-eligibles," he said.
Oak Street's model has resulted in nearly a 50% reduction in hospitalizations and reductions in healthcare expenditures, he noted.
Bloomberg News reported that CVS is seeking a private equity partner to fund growth at Oak Street Health. The company has been working with financial advisers to help find capital to back new clinics that will be opened by Oak Street, the report said, citing people familiar with the matter.
The deliberations are in a preliminary stage and the structure could change, while there is no guarantee a deal will be reached, according to the report.
CVS also is supporting the shift to value-based care through its accountable care solutions. "We've now partnered with 200 health systems, 70,000 physicians, nearly a million Medicare members now are provided support services, whether that's care management, social determinants of health screening and connection to community-based services," Chaguturu said.
Through these investments, CVS is trying to offer more affordable healthcare services. "We all know the cost conundrum that we have where medical inflation is outstripping general inflation. We also recognize there's a need for more convenient care. People want care that's not in the traditional settings of having to go downtown to an academic medical center. They want something that's locally based, or ideally, virtual or in-home," he said, adding that access to primary care and supporting value-based care are the other two challenges the company is trying to address.
The company is making these investments even as other retailers are pulling back on clinics and telehealth services. Walmart is shuttering all 51 of its Walmart Health centers along with its virtual care services. Walgreens is scaling back the footprint of its primary care clinic chain VillageMD. The drugstore chain is in the process of shuttering 160 VillageMD locations.
Reuters reported that CVS also is closing dozen of its clinics in Southern California and New England.
Chaguturu said CVS is putting resources behind digital-first experiences to enable "connected, integrated" care for patients. It's also worth noting where CVS is not investing when it comes to healthcare assets.
"We've made strategic choices not to do a lot of things. We're not building hospitals, we're not building ambulatory surgical centers. What we have done is chosen those areas that we believe are important for population health and improving cost, quality and experiences. For that to succeed, you have to create these connected experiences. We believe that that requires interoperability and digital-first experiences. " he said Thursday.
CVS Health boasts that it connects 55 million individuals who are digitally engaged with the brand. "We have specialty pharmacy and 95% of individuals who interact with specialty pharmacy are doing that through a digital application," he said. "We've been adding telemedicine into all of our businesses, MinuteClinic providing virtual care services. We've also launched virtual primary care where we can provide primary care services for individuals."
He continued, "Because of our choice to invest in certain areas, but partner with the rest, interoperability is also a key part."
CVS Health works with electronic health record company Epic and is the largest install of Epic's EHR in the U.S., Chaguturu told Fierce Healthcare staff writer Emma Beavins in an episode of "Podnosis."
CVS has nearly 80 million patients' records and has exchanged over half a billion records between CVS Health and other providers and health systems.
"It's going to be really important to create these digital experiences within your ecosystem, but also empower the digital experiences through data interoperability across the healthcare ecosystem," he said this week.
CVS' focus on providing healthcare services at the local level may prove to be a more effective strategy than other retailers, investors say.
"We all say that healthcare is very local. It's local relationships and it's provider-centric. It's hard for an organization that is not known for healthcare to actually establish those relationships to manage healthcare," said Obadiah Sang, vice president of corporate development and strategic investment at Independence Blue Cross, during a panel discussion about investment trends at the thINc360 healthcare conference.
When discussing Walmart's plans to shutter its 51 health clinics, one investors said there are estimates that the retail giant was losing $250 million a year from operating the clinics.
"Juxtapose that to Sree's vision for MinuteClinics; that model is much more of a comprehensive wrapper, [of healthcare services]," said Michael Greeley, co-founder and general partner at Flare Capital Partners during the investor panel. "Walmart made a decision that the opportunity cost is too great. It was a pretty rational economic decision. I don't view it as an indictment of the whole value-based care model. But it's not lost on me that that happened the same month that VillageMD backed off and Walgreens is going through its issues. Those are maybe retail orientations that are not totally appropriate, but the more wrapper comprehensive offering CVS is building may be the more popular way."