The CVS Of The Future

CVS and Aetna are merging. And it may be the start of a new trend for the future when major drug store chains and health insurers join forces.

CVS drug store chain acquired Aetna, last November for $69 billion and may become the largest health care merge in history.  As a result, CVS is creating three pilot ‘HealthHub’ facilities in the Houston, TX area which will provide various health care and drug store services all in one location.  

Some hospitals and healthcare facilities do provide drug store services on their premises, but the CVS ‘HealthHub’s’ will be a little different. 

CVS’ CEO Larry Merlo says his ‘HealthHub’ services will be hard to replicate online.

Merlo’s plans are ambitious in that he wants to turn the company’s 9,800 stores nationwide into ‘health care destinations’ offering a range of health services to protect against competition from Amazon and similar mergers in the health care industry.

Currently, CVS has 1,100 walk-in ‘MinuteClinics’ that offer basic care for minor  health care needs like strep throat or ear infection. However, the ‘HealthHubs’ will be better equipped to also handle patients with chronic illnesses such as diabetes and respiratory dysfunctions and even have onsite dietitians, nurse practitioners, lab devices, and on-shelf medical supplies.  

Ross Muken, an analyst at Evercore ISI, says that CVS wants a ‘holistic approach’ to healthcare. It is the largest pharmacy chain in the US and according to statistics, almost 70% of the population lives within three miles of a CVS store. Lisa Gill, health care analyst at JP Morgan says that one of the most trusted advisors in health care is the pharmacist.

Aetna has around 39 million customers it collects premiums from and with their merger CVS will create a super huge customer base.  CVS believes merging with Aetna will lower costs and increase profits from those plans.

CVS is not without competition though. Urgent-care clinics are popping up across the nation and some giant retailers like Walmart are dipping into the healthcare reservoir as well.

Another way CVS is looking to drive down costs is to focus on chronic conditions which are the most expensive to insure in the US such as: heart disease, diabetes, hypertension, asthma and mental health. These five areas of healthcare account for 80% of the $3.5 trillion in yearly health care spending.

CVS ‘HealthHub’ stores in Houston will target patients with these chronic illnesses by expanding MinuteClinic services with screenings, diagnosing, treatment and follow-up care.  

Hub stores will vary from region to region depending on which illnesses have a higher ranking for the area but all hubs will have patient rooms, classes for health and nutrition seminars and be connected to TelaDoc, a virtual health care platform connecting doctors and patients.

CVS’s goal is that people will come to their facilities rather than to the ER for minor conditions providing an alternative to the costliest care (the emergency room) option for insurers. 

And hopefully too people will also come to CVS for vision, hearing or blood pressure screenings and even for dental services through the SmileDirect Club. CVS has high hopes for their all-in-one-place‘HubHealth’ care services for the future!