CVS Health Hubs Target Aetna Members As Rollout Escalates

CVS Health’s strategy to reformat hundreds of drugstores into “HealthHubs” is to first integrate these new healthcare options in markets where there are Aetna health plan members.

CVS, which completed its acquisition of Aetna in December of 2018, is now focused on rolling out the HealthHub stores in U.S. metropolitan areas with 50 opened last year and another 600 to 650 projected to open in 2020.

“We do need to build those critical masses,” CVS chief executive officer Larry Merlo told analysts earlier this week on a call to discuss fourth quarter 2019 earnings and the company’s outlook for this year. “As we prioritize markets, we have worked to match concentration of Aetna members for these first phases.”

Aetna has 22.9 million health plan members across the country and more and more of these members will soon be enticed to use CVS locations converting to HealthHubs where more than 20% of the drugstore is being reformatted to include new durable medical equipment, supplies and various new product and service combinations.

CVS opened 50 HealthHub locations last year in four metro areas: Atlanta, Houston, Philadelphia and Tampa. In all, CVS plans to operate 1,500 HealthHub locations by the end of 2021.

The changes in the HealthHUBS will be noticeable to CVS customers and Aetna health plan members, executives said.

“In the HealthHUBs, we’re taking probably 20% of the sales floor, converting it to the hub services and at the same time, we’re shrinking the general merchandise and adding a lot of health and wellness items,” CVS chief operating officer Jonathan Roberts told analysts. “When we look at our 2019 HealthHUB stores, we’re actually seeing positive growth in the front store sales and margin because health and wellness are actually carrying higher margin.”

The move to add new healthcare services comes as rival retailers in the healthcare space like Walgreens Boots Alliance and Walmart look to fill the emptying space in their brick and mortar stores in the face of changing consumer shopping habits driven in part by Amazon and online retail generally.

What CVS learns in the HealthHUB rollout is designed to benefit all of the company’s drugstores as pharmacists are given relevant patient information and data “to help them help their patients identify their next best action,” CVS executives have said. CVS has more than 9,800 retail locations.

“We are taking components of what we’re learning in the HealthHUBs, and we’re deploying those products and categories across our fleet,” Roberts said.

CVS HealthHubs “continued to outperform their control group with higher script volume and increased MinuteClinic visits,” Merlo said.

CVS executives believe healthcare providers in their stores, which include pharmacists and nurse practitioners, can treat 80% of what a primary care doctor can treat.

“We also began rolling out pharmacist panels at our HealthHUBS, which we will expand to other retail locations,” Merlo said. “These panels provide a holistic, 360-degree view of the patient by combining pharmacy and medical data. And having integrated data at their fingertips, our pharmacists can improve medication adherence, optimize medication regimens, close gaps in care and connect patients to their health plan, a MinuteClinic or other appropriate resources.”

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