How CVS Becomes a Full Service Healthcare Provider

After buying out Aetna, the CVS drugstore chain transforms into a full-service healthcare provider.

The company announced last week that it was testing its new HealthHUB store format at three locations in Houston, Texas. While the retailer will continue to offer health, beauty and personal care products, the new model will allocate more than a fifth of a physical location to health services.

In addition to flu shots and prescription refills, the new hubspots will focus on managing chronic care for conditions such as sleep apnea and diabetes. They will also include health kiosks for measuring blood pressure, digital apps for weight loss, and in-store dietitians for nutrition classes.

“This has the potential to encourage more traffic in stores and increase store sales,” said Ana Gupte, inventory analyst at SVB Leerink.

CVS, which has suffered from slowing sales due to increased online competition from Amazon, is betting that the rise of healthcare services will bring customers back to its doors. The drugstore company operates approximately 10,000 physical stores, and more than a tenth of those locations already offer MinuteClinics, its retail clinic service. CVS employs around 40,000 healthcare professionals.

While health centers are part of the pilot program, Larry J. Merlo, chief executive of CVS, said he did not expect to convert all physical stores to health centers. Instead, he plans to target a set of stores in each market.

“Our goal is not to turn every store into this. We’re thinking about this hub-and-spoke concept where each store can have a set of basic offerings, but the hubs, if you will, would have the full range. of services available, ”Merlo said in a presentation at a company conference last November.

CVS has positioned itself as a healthcare provider for years. Last November, he finalized the purchase of Aetna, the country’s third-largest health insurance company, for around $ 69 billion. Aetna covers around 22 million people, creating a large consumer base for CVS health centers. CVS Caremark has 93 million members, making it the largest pharmacy benefits manager in the country.

In 2014, CVS bought Omnicare, which focuses on long-term care in retirement homes. CVS also focuses on chronic diseases, particularly cardiovascular issues, diabetes, hypertension, asthma, and behavioral health. In the same year, she also stopped selling tobacco products.

CVS isn’t the only retailer to jump into healthcare, although it may be tackling the market more aggressively than others. Walgreens is considering a partnership with Humana, a health insurance company with more than 14 million members.