CVS sees opportunity to influence cost of care with primary care push
As CVS Health continues its push to offer more health services, it sees an opportunity to influence the cost of care and outcomes for patients and health plan members.
The company is in the midst of a plan to redesign thousands of its stores, with more space dedicated to clinical services. It’s also offering health coaching and dieticians in some of its stores, and recently piloted offering mental health services at some of its MinuteClinics staffed with licensed social workers.
At the same time, insurance subsidiary Aetna also rolled out a virtual primary care plan earlier this year, that would steer people toward virtual visits through Teladoc or in-person services at CVS’ MinuteClinics for no copay.
“The consumer has been incredibly challenged by the complexity of the healthcare system,” CVS CEO Karen Lynch said in a Wednesday morning investor call. “Our overall strategy is to make sure we can provide them access points with lower costs, higher quality, with convenience and overall engagement. We think those factors will help us with the longer-term strategy of driving down healthcare costs.”
Currently, 750,000 people are eligible for Aetna’s virtual primary care plan, which debuted in August. With primary care, the company sees an opportunity to influence the cost of care by better engaging patients and navigating them through the health system.
“We’re starting to get traction with Aetna members with these plan designs, and we think we’re getting quite good at it,” she said.
Here are some more highlights from the company’s third quarter earnings call:
The Delta variant drove a surge in Covid-19 testing, hospitalizations
For CVS’ insurance business, the surge in Covid-19 cases driven by the Delta variant resulted in higher-than-expected medical costs this fall. The company reported a medical benefit ratio of 85.8% for the quarter ending in September 2021, a 1.8% increase from the same quarter last year.
CVS CFO Shawn Guertin said Covid-19 hospital admissions for its commercial plans in August and September were in line with peak levels experienced in January of 2021, nearly triple the amount of hospitalizations seen during the summer months when cases were lower.
Testing costs, which were also expected to decline, were about in line with January’s levels. They represented about 35% of the company’s Covid-19 costs for the quarter.
More people filled new prescriptions
For CVS’ largest segment, pharmacy services, revenues increased 9% to $39 billion. This was largely driven by Covid-19 vaccines and more people starting new prescriptions.
In the third quarter, CVS administered 11.6 million vaccines. By comparison, it administered 17 million in the second quarter of 2021. The company is gearing up to administer more shots through Covid-19 boosters and pediatric doses, after the FDA recently authorized a lower-dose version of Pfizer’s Covid-19 vaccine for kids ages 5 through 11.
The company also processed more pharmacy claims compared to last year. As doctor’s offices were closed temporarily at the beginning of the pandemic, and procedures were postponed or canceled, the number of new prescriptions dropped in 2020.
In total, CVS reported revenues of $73.79 billion for the quarter, a 10% increase from last year, and a net income of $1.59 billion, up 30%.
Photo credit: CVS Health