Business how to earn money from home without any investment how to make money from home part time real ways to make money from home for free
- This story was delivered to Business Insider Intelligence Digital Health Pro subscribers earlier this morning.
- To get this story plus others to your inbox each day, hours before they’re published on Business Insider, click here.
Select Aetna health plan members who use CVS Health services, like those offered in its HealthHub locations, can look forward to “zero” cost and “low copay” treatment options, according to statements made by CVS CEO Larry Merlo at this year’s JPMorgan Chase Healthcare conference.
Business Insider Intelligence
This announcement aligns with other recent moves CVS has taken to more closely integrate its retail pharmacy business with Aetna — the US’ third largest health insurer by membership — after their $70 billion merger in late 2018.
Key to the success of CVS-Aetna’s new plans will be the expansion of CVS’ HealthHub retail clinics, which are set to become a central pillar of CVS’ growth and innovation strategies.
A surge in foot traffic to HealthHubs from Aetna members could help drive revenue growth in CVS’ lagging retail pharmacy business. CVS rolled out its first HealthHub locations in Houston, TX in early 2019, vowing to launch 600 new HealthHubs by the end of 2020 and 1,500 by end of year 2021.
HealthHubs differ from traditional CVS pharmacies by placing a greater emphasis on health, boasting walk-in clinics and care concierge teams, for example — which has brought about increased store traffic, and stronger front-store margins, Merlo recently told CNBC’s Jim Cramer.
And CVS’ retail pharmacy business could use the help: It was the worst-performing segment of CVS’ business in Q3 2019, with revenue inching up a mere 2.9% annually. But the segment could see stronger growth if CVS successfully herds Aetna members toward its one-stop-shop HealthHub locations, where they can receive in-person care for general ailments, access routine medical services, and pick up their meds.
And offering convenient, comprehensive in-person health services could help the pharmacy chain ward off competition from digital pharmacy upstarts and better appeal to millennials. Despite controlling nearly 30% of the total US pharmacy market as of 2017, CVS ranked dead last among brick-and-mortar pharmacy chains when it comes to customer satisfaction, per a 2019 JD Power report.
And unhappy consumers could spell trouble for CVS, as they could jump ship to any of the upstarts racing into the retail pharmacy realm, like NYC-based Capsule, an e-pharmacy startup that bagged $200 million in funding back in September to scale its no-cost, same-day medication delivery service nationwide.
But doubling down on its HealthHub stores — which Merlo said will cover 80% of what a primary care doctor is capable of treating — could help keep customers within the CVS Health ecosystem, while placing a new focus on easily accessible retail clinics may also help CVS capture new millennial customers: Nearly 25% of US millennials say they’ve gone five or more years without seeing a primary care doctor — and over 30% cite inconvenience as the primary reason why, according to a 2019 Harmony Healthcare IT survey.
The CVS-Aetna merger is part of a growing trend of consolidation we’ve observed among large US insurers, providers, and pharmacies — but these firms will need to be careful not to draw antitrust scrutiny in their pursuit of vertical integration. Health insurer Cigna shelled out $67 billion to purchase the US’ second largest pharmacy benefits manager (PBM) Express Scripts in 2018.
And less than a year later, CVS followed suit with its own gargantuan deal to merge with Aetna: The result of that tie-up is that CVS now controls the third largest US health insurance company, the second largest pharmacy chain in the US, and the country’s largest PBM in CVS Caremark, per data from Open Markets Institute.
In other words, one company (CVS) is doing business with itself across three fronts: It’s the insurance company, the pharmacy dispensing medication to its members, and the middleman responsible for negotiating between the two so that customers get the best rates. But I (Zach) have doubts about how long these massive healthcare organizations can continue to skirt antitrust concerns, as it will likely become increasingly difficult for independent pharmacies and providers to compete, and federal lawmakers are beginning to raise questions around some of healthcare’s megadeals.
Want to read more stories like this one? Here’s how to get access:
- Sign up for Digital Health Pro, Business Insider Intelligence’s expert product suite keeping you up-to-date on the people, technologies, trends, and companies shaping the future of healthcare, delivered to your inbox 6x a week. >> Get Started
- Join thousands of top companies worldwide who trust Business Insider Intelligence for their competitive research needs. >> Inquire About Our Enterprise Memberships
- Explore related topics in more depth. >> Visit Our Report Store
- Current subscribers can log in to read the briefing here.