The online retail giant said it is putting the “Amazon Clinic” brand virtual health business under the Amazon One Medical brand. The change, which will eliminate the “Amazon Clinic” name, will be effective immediately.
CVS just said that it plans to acquire or take a stake in a primary-care company by the end of the year, as competition heats up with Amazon and Walgreens.
“The company wants to team up with a provider that has a strong management team and tech background and the ability to grow quickly,” said CEO Karen Lynch on the company’s second-quarter earnings call
CVS, best known for its many drugstores, has touchpoints across the health-care industry. It has acquired insurer Aetna and pharmacy benefits manager Caremark. Customers can get vaccines or urgent care at MinuteClinic outposts inside of its stores. And the company keeps adding more health services to those locations, too — it recently introduced therapy for mental health at some stores.
CVS doesn’t yet have doctor offices where patients can go for an annual checkup or appointments with a physician or nurse practitioner, though.
“CVS wants to change that by buying or partnering with a company.” said Lynch at an investor day last year.
At the time, Dr. Alan Lotvin, executive vice president of CVS Health and president of CVS Caremark, said he envisioned CVS standing out in primary care. The company wants to offer longer hours at its doctor offices so people can visit as early as 6 a.m., as late as 9 p.m., or on the weekends. It also wants to utilize simple, streamlined tech, so customers don’t have to fill out piles of paperwork.
Other health-care players have already made moves in the space. Rival Walgreens Boots Alliance is opening hundreds of doctor offices in partnership with VillageMD and became the majority owner of the company. Walmart has a small, but growing number of clinics where people can visit a doctor, dentist or therapist for a low price.
Amazon ratcheted up pressure by announcing last month that it would acquire primary-care provider One Medical for about $3.9 billion. The boutique health-care company has 188 medical offices across 25 markets, according to its latest quarterly results.
“CVS has a competitive edge with the size of its business,” Lynch said. “Nearly 4.8 million customers interact with the company each day at CVS locations. MinuteClinic visits increased 12% in the second quarter. CVS can build from the strong foundation that we already have.”
Source: CNBC
CVS Health says that it will reduce its store count by about 900 over the next three years, or about 10% of its locations. At the same time, the retail pharmacy giant plans to add health services at its remaining stores.
The company plans to have three basic models for its stores going forward. There will be traditional drugstores offering prescription services, but also sites dedicated to primary healthcare services, which would essentially be clinics capable of serving thousands of patients a day, a model that the company is already pursuing.
There will also be locations that will be modified versions of the company’s HealthHUBs, which are staffed by healthcare professionals who can offer some diagnostic capabilities, testing and advice. The staff is supplemented by digital kiosks for health and insurance questions.
“Our retail stores are fundamental to our strategy and who we are as a company,” CVS Health President and CEO Karen Lynch said in a statement. “We remain focused on the competitive advantage provided by our presence in thousands of communities across the country, which complements our rapidly expanding digital presence.”
The closures will begin in the spring of next year. CVS expects to record an impairment charge in Q4 2021 of between $1B and $1.2B, or between 56 cents and 67 cents per share. Shares in the company were up about 1.5% on Thursday. Compared with a year ago, shares are up about 42%.
CVS’ rivals have likewise been expanding their healthcare options. Walgreens Boots Alliance has said it will open 500 to 700 clinics at its retail locations over the next five years in partnership with VillageMD, a Chicago-based primary care provider.
Source: Bisnow
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