CVS Health products are displayed at a store, Monday, May 3, 2021, in North Andover, Mass. CVS Health is hiking its dividend and offering a better-than-expected 2022 revenue forecast as the health care giant prepares to dive deeper into providing more care. (Elise Amendola/AP)
CVS Health is launching a plan to use telemedicine, new clinics and teams of doctors, nurses and pharmacists to push deeper into managing customer health.
The health care giant on Thursday outlined a future that it expects to be defined by delivering care with what it sees as a unique mix of resources. The company runs thousands of drugstores, manages prescription benefits and also sells health insurance, in addition to its care expansion.
“We are closer to the consumer than anyone else,” CEO Karen Lynch told analysts during a webcast of the company’s annual investor meeting.
The company says it intends to add a few hundred primary care centers to its mix of drugstores and “HealthHUB” locations it started introducing a few years ago. The company aims to open about 1,000 of those HealthHUBs this year. Those locations can include regular drugstore services plus employees like dietitians.
The clinics will include a doctor-led care team that also may include social workers and mental health specialists.
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The goal of this approach is to give customers an easier way to keep up with their health and stay in regular contact with different care providers, depending on what they need. That can lead to lower costs and better health, especially for people with chronic conditions or those who don’t have a regular doctor.
Lynch said Thursday that primary care makes up only about 10% of national health care spending but “it wields significant influence over health care utilization.”
She told analysts last month that company leaders believe they need to “push into the primary care so that we can influence the overall cost of care.”
CVS Health isn’t alone in its ambition. Drugstore rival Walgreens and other health care companies like UnitedHealth Group Inc. also have moved deeper into providing health care. They’re all competing to become regular guides for customers through the complicated U.S. care system.
Walgreens, for instance, is attaching hundreds of VillageMD primary care practices to its stores over the next few years.
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A big target for this competition: Millions of aging baby boomers who will need more regular care and have coverage through government-funded plans like Medicare Advantage.
CVS Health is introducing this push while it also deals with a staffing shortage in some of its drugstores, which have been seen waves of COVID-19 vaccinations and tests and could soon be handling pill treatments for the virus.
The company has said it hired about 23,000 employees from a push it started in September. About half of that total was pharmacy technicians, who can deliver vaccines.
CVS Health, which runs about 10,000 retail locations, also is planning to close several hundred stores in the next three years, as it adjusts to population shifts and customer needs.
On Thursday, the company also said that it will increase its annual dividend by 10% to $2.20 from $2 starting in February. The company also has approved a $10 billion share repurchase program and said it was the first time CVS Health has made either move in about four years.
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CVS Health also said it expects adjusted earnings of $8.10 to $8.30 per share next year on $304 billion to $309 billion in total revenue.
Analysts expect, on average, earnings of $8.24 per share on $301.2 billion in sales for 2022, according to FactSet.
Shares of Woonsocket, Rhode Island-based CVS Health Corp. climbed nearly 4% to $96.75 while broader indexes slipped Thursday in midday trading.
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