Transformation initiatives unveiled at Investor Day
“Our goal is to fundamentally transform the consumer health experience for the millions of Americans we interact with every day, while creating value for our patients, members, partners, and shareholders,” said Larry Merlo, president and chief executive officer, CVS Health. “We have combined with Aetna to build a powerful and unique business model that will guide our journey to becoming the most consumer-centric health company.”
He added that CVS Health is dedicated to putting consumers at the center of its strategy and helping them achieve their best health by strengthening health care locally and making it simpler to use and understand.
The CVS Health management team is focused on:
- Growing and differentiating CVS Health’s businesses with a focus on driving engagement through personalization, winning in high-growth products and services and delivering new and innovative benefit designs and reimbursement models.
- Expanding HealthHUBs to build on the success of its pilot program in Houston, Texas. HealthHUBs are a powerful example of how CVS Health can provide consumers with convenient, personalized and integrated access to local health care. The company will open additional HealthHUBs in Houston, Atlanta, Philadelphia/Southern New Jersey and Tampa this year, and plans to have 1,500 total HealthHUBs operating by the end of 2021.
- Taking advantage of the unmatched breadth of CVS Health’s capabilities to introduce new products and services. CVS Health will optimize government programs, introduce new risk-based carve-outs, develop programs aimed at complex conditions like chronic kidney disease, and create new analytics products.
- Building a robust technology infrastructure designed to support transformational initiatives and protect CVS Health’s breadth of data. CVS Health will deploy that data across the organization to create a holistic view of the patient, which will offer insights on how to communicate with the patient most effectively, including providing the next best action they can take to improve their health.
- Realizing cost savings by modernizing enterprise functions and efficiently integrating operations following the Aetna transaction.
CVS Health chief financial officer Eva Boratto discussed how a focus on synergies and modernization will drive a more efficient company, and how investments in technology and new products will create long-term value.
“We are continuing to drive significant synergies and cost savings across the entire enterprise as we execute our integration plans,” Boratto said. “Going forward, we also have truly exciting opportunities to introduce programs and products that will change the way people think of and address their health.”
The company also reaffirmed its 2019 full year projections:
- Consolidated Revenues: $251.2 to $254.4 billion
- GAAP Operating Income: $11.8 to $12.0 billion
- Adjusted Operating Income: $15.0 to $15.2 billion
- GAAP diluted EPS: $4.90 to $5.05
- Adjusted EPS: $6.75 to $6.90
- GAAP Net Cash Provided by Operating Activities: $9.8 to $10.3 billion
- Cash Available to Repay Debt: $4.2 to $4.6 billion
The company said it expects to balance near-term execution with long-term value creation through strategic initiatives and consumer-centric products which are projected to drive Adjusted EPS of at least $7.00 in 2020, mid-single digit percent Adjusted EPS growth in 2021, and low-double digit percent growth in 2022 and beyond. Additional details will be provided in today’s presentations.