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CVS Health and health insurer Aetna have spent 2019 experimenting with what they say is the drug-store of the future — a one-stop destination for an individual’s health needs.
Now, the future is coming to Hartford.
Aetna President Karen Lynch, in an interview with the Hartford Business Journal, confirmed CVS will be opening one of its new “HealthHub” locations in the Capital City during the first quarter of 2020.
A specific site has not been identified, but it’s part of a larger national push by CVS/Aetna to open 1,500 HealthHubs by 2021. The stores, which Lynch described as a “front door” to health care, will house nurse practitioners and a care concierge team, expanded products and services for minor illnesses and injuries as well as immunizations, wellness and health checks, and on-site counseling and treatment for chronic conditions such as diabetes.
CVS currently has about a half-dozen locations in Hartford.
“We want to provide a simple, convenient access point for health services that are local and in the neighborhood, so we can engage with our members in a different way,” said Lynch, who is also executive vice president of CVS Health. “It’s about having a simplified experience, but more importantly having individuals engaged in their health throughout their life.”
HealthHubs are the latest move by Rhode Island-based CVS to turn itself into a provider of many of the healthcare products and services that a customer needs. CVS already has more than 1,000 walk-in MinuteClinics that offer basic care for strep throat or an ear infection. But HealthHubs aim to offer a broader array of services.
They have less shelf and floor space devoted to things like greeting cards, magazines and snacks, and a greater focus on health and wellness products, such as monitoring devices that sync to a mobile phone, aromatherapy, fitness essentials and durable medical equipment. There is also more focus on treating chronic health conditions, five of which — heart disease, diabetes, hypertension, asthma and mental health — account for about 80 percent of the $3.5 trillion in annual U.S. healthcare spending.
CVS believes it can become a “coordinator of care for patients,” using a concierge team, nurse practitioners and pharmacists to provide education counseling on exercise, diet and medication adherence, which is a key to lowering healthcare costs, Lynch said.
Patients with chronic conditions may go to the doctor and leave with a treatment plan, but they’re often left on their own after that. That’s where CVS wants to carve out a role and potentially help bend the escalating healthcare cost curve.
Feeling sick? Come to the HealthHub to see a medical professional. Need a flu shot? Go to one of CVS’s Minute Clinics. CVS also offers health insurance through Aetna, which it bought for nearly $70 billion in 2018, and owns pharmacy benefits manager Caremark too.
CVS also wants patients to come to its stores for more minor conditions, rather than going to the emergency room, which is the costliest care option for insurers like Aetna. Trips to the ER can run up providers thousands of dollars every visit.
Michael Cherny, a healthcare analyst for Bank of America Merrill Lynch, said HealthHubs aren’t meant to replace primary care doctors but they can be an alternative or complement.
For example, he said a diabetes patient might go to their regular doctor for a broader checkup, but visit a HealthHub to monitor their blood-sugar levels, make sure they are getting their prescriptions filled, and discuss dietary and exercise plans.
“It’s the ability to help manage the wellness of the individual and stay in tune with him or her,” he said.
Aetna also has a significant presence in CVS stores, Lynch said. For example, knowledge centers are being used to educate seniors about Medicare Advantage offerings during the current open-enrollment period. That’s a major, growing line of business that most health insurers are chasing.
“That is a big initiative,” Lynch said.
Gov. Ned Lamont, who recently met with CVS CEO Larry Merlo, said having a HealthHub in Hartford will be a big deal.
“[Merlo] says we can do 80 percent of everything you can do with a primary care physician,” Lamont told HBJ. “Even if he is off by a factor of two, that is a big help.”
He said his administration is looking at HealthHubs more broadly.
“It’s a lot less cost,” Lamont said. “Maybe I can work out something with the state-employee plan to funnel them to the low-cost alternative to the emergency room. It makes sense to me.”
CVS plans to have 50 HealthHubs up and running by the end of this year and 650 by the end of 2020, before it reaches its 1,500 goal by 2021. They are being built in current CVS locations, especially those with MinuteClinics.
The expansion comes at a precarious time for CVS and other pharmacy companies like Walgreens, which are grappling with a number of headwinds that include lower prices for generic drugs and a decline in reimbursement rates for medications from state and federal government healthcare plans.
Walmart and Amazon have become tougher drug-store competitors as well. Walmart has bulked up its pharmacy business, while Amazon bought online pharmacy PillPack last year.
CVS and Walgreens are being squeezed in the front end of the store by Costco and dollar-store chains like Dollar General, which all sell many personal-care products and snacks at lower prices.
Drug-store investors are also concerned about the new healthcare venture, dubbed Haven, which is a partnership of Amazon, Warren Buffett’s Berkshire Hathaway and banking giant JPMorgan Chase. Haven has pledged to lower healthcare costs for the employees of those three companies.
Add that all up and it makes sense that CVS would want to focus more on offering actual medical-care services to differentiate itself.
Cherny, the Bank of America analyst, said CVS’ combination with Aetna gives it a competitive advantage.
“Over time, cross selling integrated pharmacy-medical offerings in the commercial markets is going to be quite appealing,” he said.
A CNNMoney report was used in this story.
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