CVS Health just revealed a key piece of its plan to change how Americans get healthcare

CVS Health just revealed a key piece of its plan to change how Americans get healthcare

CVS Health CEO


CVS Health President and CEO Larry J. Merlo

  • CVS Health and Aetna have officially combined to create an entirely new kind of healthcare company.
  • In a presentation Tuesday at the JPMorgan Healthcare Conference in San Francisco, CVS CEO Larry Merlo laid out the first steps the combined company is taking to change healthcare.
  • CVS is opening a test store in Houston with more healthcare services, and also plans to test programs to treat chronic diseases and keep patients out of the hospital.

CVS Health and Aetna officially merged at the end of 2018.

The $70 billion merger combines a chain of nearly 10,000 pharmacies that also owns a drug benefits business with one of the biggest US health insurers. The result is an entirely new healthcare company that can wield a tremendous amount of power over how healthcare gets paid for and provided to patients.

In a presentation on Tuesday at the JPMorgan Healthcare Conference in San Francisco, CVS CEO Larry Merlo outlined for the first time how the combined company will provide healthcare differently. The main goals are: keeping patients healthier and out of the hospital, caring for patients at less-costly locations (such as CVS's clinics instead of emergency rooms), and pioneering new methods of caring for devastating chronic diseases like cancer and heart failure.

Achieving those goals will help CVS boost its profits. Since it now owns is a health insurer, the company will spend less on medical care if it can keep customers healthier, or care for them at clinics instead of hospitals.


Read more of Business Insider's coverage from the J.P. Morgan Healthcare Conference here

A big component of the strategy is providing more healthcare in CVS stores, both at the pharmacy counter and via the company's MinuteClinics. To make space, CVS is removing some products from the front of the stores where it's piloting the new approach.

"We can open a new front door to health that is both easier to use and less expensive, while at the same time, providing convenient access to high-quality health care," Merlo said during the presentation.

The strategy also helps CVS find new use for the floor space in its 9,800 locations, as customers increasingly shop for everyday goods on Amazon. And providing more care in stores can help CVS counter forays by rivals like Amazon into healthcare. Amazon, for its part, acquired the pharmacy startup PillPack last year, marking its entry into the drug-delivery business.

To start, CVS is opening up its first "health hub" in a redesigned store in Houston in February. On Tuesday, the company revealed what that store will look like. You can see that there's a lot more store space devoted to providing healthcare, including at the clinic and pharmacy.


CVS Health Hub Pilot Store Houston

CVS Health

CVS revealed plans for a new kind of store where it will provide more types of healthcare.

The MinuteClinics in the pilot stores will offer more services, including disease screenings and blood draws. CVS already has about 1,100 MinuteClinics across its stores. They're usually staffed by nurse practitioners or physicians' assistants, and now provide basic checkups and care for minor illnesses and ailments.

The stores will also have a "care concierge," who might help individuals understand how their health insurance works, or help them use health and wellness devices and technology.

CVS is also testing several other initiatives to improve how its customers get healthcare, using the resources of the combined company.

In one program, CVS pharmacists will call Aetna members who the company thinks could be at high risk of a negative health event, and counsel them on how to improve their health. A second outreach program will focus specifically on Aetna members with heart disease.


Another focuses on Aetna customers who've been in the hospital. To make sure they get the care they need after leaving the hospital and prevent them from having to go back, Aetna care managers will schedule followup visits for them at MinuteClinics, if they can't get in to see their usual doctor.

At the MinuteClinic, healthcare providers can make sure the patients understand their disease and how to manage it. They'll also check that patients have the right prescription drugs and know how to take them.

"Helping people on their path to better health has been a cornerstone of our purpose at CVS," Merlo said. "As we zoom out and look at the broader health care market and the savings that can be achieved by more effectively managing chronic conditions, the opportunity here is massive"

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