CVS Health projecting $304 billion in revenue next year
The projections are due in part to a strategy of investing in high-growth areas and introducing new health products and technologies.
Photo courtesy of CVS Health
CVS Health has projected a healthy chunk of revenue in 2022 to the tune of at least $304 billion, and during its Investor Day the company said it may take in as much as $309 billion.
The organization also updated its guidance for 2021, anticipating about $290.3 billion by year's end. For comparison, Fortune estimated CVS Health's 2020 revenue at about $269 billion.
The growth in revenue projections is due in part to a company strategy of investing in high-growth areas of the business and introducing new health products, services and technologies, which CVS said will enhance shareholder value.
The company will focus on a number of priorities meant to enhance this strategic growth, including advancing primary care delivery capabilities. CVS said this will guide consumers across the care continuum to sites and to providers that meet their needs – both in person and virtually.
This approach is geared to complement the traditional provider network, and to continue to expand ways to use risk-based arrangements and value-based care.
CVS will also focus on optimizing the retail portfolio to serve as community health destinations by pivoting the store footprint to focus on advanced primary care centers, enhanced HealthHUB locations and traditional CVS Pharmacy stores. As announced last month, the company will close about 900 stores over the next three years to "reduce store density."
The organization will be launching new all-payer health products and services meant to diversify the company's growth portfolio with new employer, consumer and health plan solutions. This will include the expansion of home health services, the launch of health-related subscription models for broader populations, the commercialization of analytics and insights, and establishing all-payer and provider enablement services.
Another facet of CVS Health's strategy: Enhancing omnichannel health services. This will include execution of the company's omnichannel pharmacy strategy, with integration across all fulfillment channels, to make pharmacy interactions more personalized.
WHAT'S THE IMPACT
Ultimately, CVS Health said its goal is to be a fully integrated company, creating measurable value for customers and shareholders.
The company highlighted a multi-year observational study of Aetna's commercial self-funded business that shows consistent improvement in utilization and cost of care when the member has both Aetna medical and pharmacy benefits. CVS Health closed on its $69 billion merger with Aetna in 2018.
Integrated members were associated with a sustained 3 to 6% decrease in per member per month medical costs over a three-year period. Members who filled prescriptions at CVS Pharmacy locations were associated with 6% higher adherence across chronic conditions, including congestive heart disease, diabetes and hypertension, and demonstrated at least a 40% higher level of engagement in supportive care management programs in 2020.
THE LARGER TREND
CVS first announced it would be closing 900 retail stores nationally back in November. It will create three new distinct store formats aimed at driving higher engagement with consumers and to serve as community health destinations.
These include traditional CVS Pharmacy stores, which will provide prescription services and health, wellness and personal care, sites specializing in primary care service offerings, and enhanced versions of HealthHUB locations, which offer screenings, monitoring, counseling and treatment options, as well as products for common health and wellness needs.
Back in June 2019, CVS announced plans to open another 1,500 HealthHUB sites across a two-year period.
CVS faces competition from other pharmacy retailers, such as Walgreens Boots Alliance, which is adding similar health centers. All represent competition to traditional health providers.
CVS Health serves an estimated 38 million people through health insurance products and related services, including a Medicare Advantage offering and a stand-alone Medicare Part D prescription drug plan.
ON THE RECORD
"Now is the time to undertake our next major evolution and capitalize on our role as the leading health solutions company in America," said CVS Health President and CEO Karen S. Lynch. "By leaning into our high-growth foundational businesses and expanding our reach in areas like health services and primary care, we have an opportunity to shift care to be more centered around the consumer while capturing a meaningfully greater portion of health care spend. Ultimately, this plan is only possible with our unique combination of assets which will allow us to lower costs, increase access to quality care and improve health outcomes for consumers, patients and members – while delivering superior results for shareholders."
Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com
