CVS Health is driving ahead with plans to expand its primary care services, including through acquisitions, according to company officials.
The Rhode Island-based pharmacy and health services conglomerate, which is also the parent company of Hartford health insurer Aetna, first broadcast its strategy to invest more heavily in primary care last year, and CEO Karen Lynch and CFO Shawn Guertin offered a more detailed view of what that might look like during an earnings call with analysts on Wednesday.
Primary care physicians would likely operate out of CVS’s existing HealthHubs and MinuteClinics to start, Lynch said. She left open the possibility that the company could start acquiring medical practices in order to build up its capacity.
“We’re continuing to evaluate our options there,” Lynch said.
Lynch and Guertin said they envision the primary care division serving all manner of customers, but an early focus would be on Medicare patients, as the program is a critical driver of growth for the company and because the demographic that has access to Medicare has a higher rate of chronic conditions in need of close attention and management.
“Our long-term aspiration is to serve a broad section of customer types, but ultimately Medicare is an important business,” Guertin said.
The primary care buildout comes as CVS Health prepares to consolidate its network. The company last year announced plans to shutter approximately 900 retail stores between 2022 and 2024, mainly due to changing customer preferences favoring online buying over in-person shopping.
Executives have said they will prioritize digital channels to support the retail side of the business.
CVS Health reported net income of $1.29 billion, or 98 cents per diluted share, for the fourth quarter of 2021, up from $975 million, or 75 cents per diluted share, in the year-ago period. Full-year earnings grew from $7.19 billion, or $5.47 per diluted share, in 2020 to $7.89 billion, or $5.95 per diluted share in 2021.
Company officials attributed those gains to increased prescription and front store volume, improved purchasing economics and the mass administration of COVID-19 vaccines and boosters through CVS’s retail and long-term care segment.
Operating income dipped on both a quarterly and annual basis, due in part to expenses associated with planned store closures over the coming three years.
