The future of pharmacy is not canned goods and greeting cards, says CVS, and they are opening 1,500 HealthHUB stores in the next two years to prove it. CVS originally piloted three next-gen pharmacy locations in Houston with the intention of offering a wider-range of healthcare services, new kinds of products, digitally-enabled tools and on-demand health advice and ‘one-minute’ clinics for patients. The new store model features an expansion in health services, including durable medical equipment (DME) and supplies for sleep apnea and diabetes management.
Pharmacy-giant CVS Health recently merged with health insurer Aetna in a $69 billion deal that was finalized last year. Their newly combined companies represent a massive healthcare business with $245 billion in annual revenues – second only to Walmart. Even with 9,800 retail locations and over 1,100 ‘one minute’ clinics, CVS has still been subject to market trends toward online health goods and services being marketed by tech-giant ecommerce sites like Amazon.
HealthHUB is part of an initiative to redefine the retail pharmacy experience. With a new emphasis placed on an empowered consumer that makes choices about their own personal health and well-being, CVS is offering space for nurse practitioners to provide assessment and pharmacists to offer more in-depth consultations. HealthHUBS are uniquely suited, in other words, to bring medical point-of-care back into the community.
“We have a sense of urgency about the need to bring real change to health care,” said Kevin Hourican, executive vice president with CVS Health, in a prepared statement about the launch of HealthHUB. “What’s clear to us is that it will take more than incremental steps to fix what is broken in the health care system. That’s why we’re excited about how the combination of CVS and Aetna can begin to establish an innovative health care model that will create an entirely new consumer experience and help people on their path to better health.”
According to CVS officials, the company has seen greater traffic and increased margins since opening their original HealthHUB location. Much of this has been attributed to higher price points and, consequently, higher profits when compared to a regular CVS store. They also reported that customers have responded well to the “care concierge” approach used at HUB locations; stating that 95 percent of customers accepted assistance and of those, 60 percent converted into a sale or healthcare service.
“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 CEO of 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.”
Shares were up 3 percent premarket last Tuesday following the news, which was announced in tandem with the company’s 2019 Investor’s Day.