Providing Consumer-Focused and Digitally Enabled Health Care
- Ranked #4 on the 2022 Forbes list published in June
- Market cap of
~$130 billion as ofSeptember 2022 - Largest pharmacy in the
U.S. based on total prescription revenue in 2021 - 9,000+ retail locations with more than 1,100 walk-in clinics
- ~74 million COVID-19 vaccines and ~55 million COVID-19 tests administered
- ~134 million members with Aetna and Caremark
- ~4.8 million consumers visit
CVS Health locations daily - Nearly 9% Total Revenue growth in 2021
- 10% dividend increase beginning in
February 2022
Advisor Access spoke with CVS Health’s Executive Vice President and Chief Financial Officer
Click Here to Read the Entire Article Online
Advisor Access:
The Health Care Benefits segment offers a range of insured and self-insured medical, pharmacy, dental and behavioral health products and services. The Pharmacy Services Segment provides a full range of pharmacy benefit management solutions to employers, health plans, government employee groups and government sponsored programs. In the Retail/LTC segment, we operate over 9,000 local touchpoints offering a wide assortment of health and wellness products and general merchandise, and annually serve over 5 million long-term care patients. Our community touchpoints offer prescription fulfillment services, patient care programs, health care services through walk-in medical clinics, medical diagnostic testing, vaccination administration, and pharmacy services to long-term care facilities.
We are constantly enhancing our broad array of offerings to help people with their health wherever and whenever they need us. We help people navigate the health care system—and their personal health care—by improving access, lowering costs and being a trusted partner for every meaningful moment of health.
AA:
SG: Our impressive second quarter performance reflects strong results and continued positive momentum across all of our core businesses.
We had a strong quarter in Health Care Benefits with revenue growth of nearly 11% year-over-year and adjusted operating income of
In Pharmacy Services, revenue grew nearly 12% compared to the prior year and delivered adjusted operating income of
In the Retail/LTC segment, our deep customer relationships, high-quality patient interactions, resilient supply chain and agile operating model all contributed to the strong quarterly performance. We delivered over 6% revenue growth versus the prior year and
Each segment contributed, meaningfully, to our second quarter 2022 consolidated results and we were pleased to raise our full year 2022 GAAP and adjusted earnings per share guidance.
AA: How has the pandemic changed approaches to healthcare, and how has CVS adjusted its strategy to accommodate changing trends?
SG: The pandemic has forced health care delivery to evolve rapidly. We are increasingly seeing consumers attracted to new, more convenient sites of care, such as virtual and in-home care. We’re also responding to what we’re hearing from employers in the marketplace where we’re seeing a continued focus on access, lower cost sites of care, transparency, flexibility, digital connectivity and really strong service. Increasingly, we are focusing on using technology to improve the consumer experience and create greater convenience.
The home health market continues to grow rapidly as a result of increasing consumer preference for in-home care, accelerated by the pandemic. The home, specifically, has high impact as a site of care and is expected to drive better clinical outcomes for many procedures as well as long-term care.
We are seeing similar trends in the virtual care space. Virtual care continues to be an important way for consumers to access alternative sites of care that are affordable and convenient particularly as it relates to behavioral health services, which remain elevated since the start of the pandemic.
It’s clear that consumers are increasingly attracted to these offerings, and members that use these solutions are very pleased with the experience, as is evident in our results.
AA:
SG:
CVS Health Virtual Primary Care complements Aetna’s virtual care strategy currently in the market and MinuteClinic’s virtual and in-person care solutions. The offering connects CVS Health’s services, clinical expertise and data for a more coordinated and consumer-centric health care experience.
With the introduction of CVS Health Virtual Primary Care, Aetna is offering plan sponsors greater benefit options to meet their members’ evolving needs. Additionally, Caremark members will now have a solution that will allow them to access more
AA: What are the greatest areas of growth for
SG: There are several key opportunities for growth in the near term and long term, both in our existing businesses and as we look to grow to execute on our strategy.
In Health Care Benefits, strong continued membership growth continues to reflect the end-to-end value of our assets, increasingly working together, one customer at a time, at a national scale. Our Medicare business remains one of our strongest growth segments, and we are focused on maintaining above-market growth in this business. In Pharmacy Services, we are a leader in specialty pharmacy with programs that drive value in the marketplace, provide substantive savings to customers and differentiate us as we pair programs with digital assets. Importantly, we’re positioned to continue to provide industry-leading drug trends as well as grow our specialty pharmacy business. In Retail/LTC, our deep customer relationships, high-quality patient interactions, resilient supply chain and agile operating model all continue to contribute to strong performance. Despite a challenging retail environment, we continue to expand services and bring new customers to
At our Investor Day conference last year, we announced our plans to expand our health services offerings in three key categories: primary care, provider enablement and home health. There are multiple pathways to achieving growth in these areas and inorganic growth is certainly part of our strategy. We are continuing to evaluate complementary health services and care delivery capabilities to enhance our overall portfolio and are taking a disciplined approach both strategically and financially. Recently, we announced a definitive agreement under which
Our vision is to be the nation’s leading health solutions company for consumers. We’ll continue to make this a reality by acquiring new primary care assets through enhanced management services organization (MSO) arrangements and owned primary care assets. Those practices will be supported by a technologically enabled health care ecosystem that is not transactional but integrated across providers and incorporates behavioral health and social determinants of health inequities directly into primary care. Ultimately, we aim to deliver a consumer experience that’s as frictionless as banking or shopping.
AA:
SG: This August, we announced a partnership with Constellation to enable the expansion of the Mammoth Solar facility, a large-scale renewable energy project in
AA: What additional actions has
SG: The health of the environment impacts the people and communities we serve. We continue to make substantive progress in advancing our sustainability strategy.
In
With retail pharmacies, distribution centers, offices and other facilities across the country, our buildings are a significant source of our total energy consumption—and, as a result, a primary focus of our energy conservation efforts. For example, we have upgraded 100% of eligible stores to energy-saving LED lighting and are expanding our efforts to update exterior lighting in our retail stores.
We are also optimizing our digital solutions to reduce paper. In
To solve for the single-use plastic bag, we have invested
Additionally, we strive to reduce the use of plastic and virgin materials and to ensure recyclability for the packaging of all Store Brand products. We have engaged the
For more information on our ESG efforts, please see our annual ESG Report.
AA: Is there anything else you would like investors to know?
SG: We have been thoughtful and deliberate in setting our vision and strategy for the future, creating a pathway to achieve low double-digit adjusted earnings per share growth over time. You can expect
We consistently achieve these goals with a commitment to sustainable business practices. We are a consumer-focused, purpose-driven company, and our purpose and our people are our competitive edge. We believe that our success depends on our diverse and inclusive workforce. In 2021, 58% of new colleagues and 51% of our overall workforce self-identified as racially or ethnically diverse, more than twice the average of the
With our unique portfolio of assets, financial strength, consumer focus and deep health care expertise, we are confident we will continue to deliver for our members, clients, patients, customers and stockholders.
AA: Thank you for your insights.
DISCLOSURES
The information contained in this facsimile message is intended only for the use of the individuals to whom it is addressed and may contain information that is privileged and confidential. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately by telephone at (707) 933-8500.
The material, information and facts discussed in this report are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. This is not an offer or solicitation of the securities discussed.
ABOUT ADVISOR ACCESS
CONTACT INFORMATION Contact: Advisor AccessSource: Advisor AccessRick Baggelaar Rick@advisor-access.com
2022 GlobeNewswire, Inc., source