CVS inks tech partnership with Microsoft to accelerate its 'digital-first' strategy

Companies across the country are confronting the digital wave in healthcare as consumers increasingly turn to their phones and computers over brick-and-mortar clinics and stores. (CVS Health)

CVS Health is tapping into Microsoft's technologies, including cloud computing and artificial intelligence, to accelerate its "digital-first" strategy.

The pharmacy retail company announced Thursday a new strategic alliance with the tech giant focused on developing innovative solutions to provide more personalized care to consumers. The tech collaboration also will provide CVS Health's more than 300,000 employees with tools to better serve more than 100 million people, company executives said.

Microsoft's capabilities and the Azure cloud computing service will provide CVS with a "technology-forward, digital-first" foundation as it works to ramp up its consumer-centric digital strategy, Roshan Navagamuwa, CVS' chief information officer, told Fierce Healthcare.

“Business services at this scale require a new level of partnership. Our collaboration with Microsoft will accelerate this work and empower our employees to provide quality care that is more personal and affordable.”  

As part of the collaboration, CVS will migrate 1,500 new and existing business applications onto Azure. The pharmacy giant also aims to leverage Microsoft's tech muscle to provide customized care experiences by combining information across different areas of the company to deliver personalized health recommendations when and where consumers need them, company executives said.

RELATED: CVS Health plans 900 store closures, lowers guidance as retail strategy shifts digital

The company will scale up retail loyalty and personalization programs that use advanced machine learning models running on Azure.

“We are excited to partner with CVS Health on its digital transformation journey, collaborating together on how the company manages health data at scale, improves the customer experience, and drives operational efficiency,” said Judson Althoff, Microsoft’s chief commercial officer, in a statement. “With the Azure platform and its AI capabilities, we will combine the power of data, the expansive reach of CVS Health’s world-class solutions, and Microsoft Teams to connect health care experts and create customized care and services that enable people to live healthier lives.”

CVS Health recently announced plans to shutter approximately 900 stores over the next three years as the company reevaluates its in-person retail strategy with more consumers going digital. Beginning next spring, the chain will close roughly 300 stores a year.

Companies across the country are confronting the digital wave in healthcare as consumers increasingly turn to their phones and computers over brick-and-mortar clinics and stores.

CVS was investing in digital technologies prior to the COVID-19 pandemic and that strategy proved to be a key strength for CVS during the past 18 months. CVS Health's reported a 600% surge in use of its retail health clinics via telehealth and a big jump in home prescription delivery in May 2020 versus 2019.

In August, the company launched a new Aetna-backed telehealth platform that combines in-person and virtual care for self-funded businesses. That program has grown to 30 customer accounts with over 750,000 eligible members as of Jan. 1, 2022, CVS CEO Karen Lynch said during the company's third-quarter earnings call.

RELATED: How Walgreens leveraged its Microsoft partnership to respond to COVID-19

The rapid shift to digital during the COVID-19 pandemic "affirmed CVS' strategic vision," Navagamuwa said.

The ability to tap into cloud computing and other technologies gave CVS the agility to move fast and ramp up digital services. "That was one big lesson from the tech and delivery perspective," he said.

Microsoft also partners with CVS competitor Walgreens to build digital health services. Walgreens announced its partnership with Microsoft in 2019 to develop new healthcare delivery models, including technology and retail innovations to disrupt the healthcare delivery space.

CVS also plans to use data science to improve access to care and health outcomes. Throughout the pandemic, Navagamuwa tapped into Microsoft's cloud technology to build analytical models to help coordinate an efficient approach to get COVID-19 vaccine shots into arms. CVS has administered approximately 43 million vaccines to date.

A big area of focus will be creating more personalized care experiences for customers by leveraging health data and digital tools, Navagamuwa said.

RELATED: Aetna launching nationwide virtual primary care solution

"We're thinking about how do we create the right care experiences using things like nudges and how do we recognize when a customer is ready to take the next best action for them, and then time the message to engage that customer. So looking at the customer's overarching care plan and then have mobile alerts delivered just in time for an annual cancer screening or perhaps a reminder to buy sunscreen if the customer has a heightened risk for melanoma," he said. "We want the customer to be receptive to that message; we don’t want spam you, we want to engage you."

CVS Health currently leverages Azure cognitive services like computer vision and text analytics for health that automate tasks. In its specialty pharmacy business, CVS Health has digitized intake using these services—including the 40% of prescriptions that arrive as paper or fax—helping technicians fill prescriptions, faster and easier than previous methods.  

Microsoft and CVS Health will also explore innovative technology solutions that will support consumers, employees and ecosystem partners. Microsoft HoloLens, Dynamics 365 Guides, and Remote Assist can simplify complex procedures with intuitive tools to help support CVS Health employees. Microsoft Azure AI and cognitive capabilities can also extend to automate administrative and predictive processes and reduce waste through co-innovation with CVS Health’s deep community presence and health care expertise, according to company executives.

"It’s a combination of bringing together our leading assets, capabilities and experiences with what Microsoft does well with technology. We have broad reach and deep clinical experience and expertise and we're going to marry that with Microsoft's tech capabilities," Navagamuwa said.

The collaboration also will benefit frontline workers by providing them with tech tools to be more agile, helping retail employees more easily consume key information needed to answer common questions and solve customer needs faster, according to Navagamuwa.