WOONSOCKET, R.I. — CVS Health continues to broaden and deepen its ability to support the health and well-being of Americans, delivering on the ambitious plan crafted by president and chief executive officer Karen Lynch.
“Nearly 18 months ago, we outlined a bold shift in our strategy and shared our vision to become the leading health solutions company for consumers,” she said during a recent conference call to discuss another strong quarterly financial performance. “Our goal is to redefine health care by creating a model that is convenient, affordable, connects care and puts the patient at the center.
“Achieving this vision requires the right set of capabilities to serve a broader patient, customer and community base. At the center of our vision is a value-based platform that is multi-payor, multichannel and successful at driving consumer engagement, all leading to improved health outcomes. Importantly, we have completed the acquisitions of Signify Health and Oak Street Health. These acquisitions significantly advance our value-based strategy by adding primary care, home-based care and provider enablement capabilities to our platform.”
The addition of Signify Health, which specializes in provider enablement and the delivery of health care services in people’s residences, and Oak Street Health, a provider of primary care for older adults, also strengthens CVS Health’s technological capabilities. Lynch noted that the acquisitions will facilitate innovation in such areas as data analytics, automation and product development.
The two deals are the latest in a series of acquisitions that have transformed the company from a drug store chain into a multifaceted health care provider. Beginning in 2006, CVS moved into retail clinics, pharmacy benefits management and health insurance. With the purchase of Aetna in 2017, Lynch, who had been president there, joined CVS Health.
The emergence of the company as a powerhouse in both health care and retailing — revenue in fiscal 2022 totaled $322.5 billion, putting CVS Health at No. 6 on the Fortune 500 — hasn’t distracted Lynch and her team from strengthening the core drug store business. CVS Pharmacy is gaining momentum, even as a program to rationalize the store base moves ahead.
Commenting on first quarter 2023 results, Lynch said, “Performance was strong in both the pharmacy and the front store. Pharmacy revenue increased by 10% versus the prior year, driven by product mix and prescription growth of 2.5%. Our growth in the retail pharmacy is notable and has resulted in significant market share gains over time.
“This is a testament to the value we provide our pharmacy patients and the investments we have made to improve their experiences. Front-store revenues grew by 5%, or nearly 8% on a same-store basis, driven by the strength across a variety of categories, including beauty and personal care, as well as consumer health products.”
Lynch and her colleagues are also committed to serving patients and customers beyond the four walls of the store.
“We remain critically focused on digital engagement and achieved a significant milestone this quarter, exceeding 50 million unique digital customers,” Lynch said. “These customers are driving meaningful results, with digital sales in the quarter up more than 30% versus the prior year. Engagement levels are strong as these customers spend 2.4 times more than our non-digitally engaged customers and at higher margins. We continue to drive innovation and expand our digital offerings to meet customers’ needs.”