CVS Makes $8 Billion Bet on the Return of the House Call

“We are both building an integrated experience that supports a more proactive, preventive and holistic approach to patient care, and I look forward to executing on our shared vision for the future of care delivery,” the chief executive of Signify, Kyle Armbrester, said in a statement on Monday.

CVS’s move toward health care began in earnest nearly a decade ago, with its $21 billion acquisition of pharmacy benefits manager Caremark Rx. It acquired more than 1,000 of Target’s pharmacies in 2015 and the health insurer Aetna for $69 billion in 2018.

The Centers for Medicare and Medicaid Services said in 2019 that it expected national health spending to reach $6 trillion by 2027, consuming a larger share of gross domestic spending, as baby boomers aged and the price of services rose. But many Americans still do not get care, in part because of the costs and inconvenience.

The pandemic changed the way people seek medical attention and how companies think about providing it, as many patients sought new alternatives to traditional hospital care. CVS and other retailers like Walmart played a key role in the Biden administration’s coronavirus vaccination campaign, and the White House also started a “test to treat” program to allow patients to test for the virus and obtain a prescription for antiviral pills at the same retail location if they tested positive.

Change across health care has lead to deal-making in the industry. Amazon announced in July that it planned to acquire One Medical, a chain of primary care clinics around the country, for $3.9 billion. Walgreens has announced a string of deals, including most recently an acquisition of Carecentrix, another company that provides services in the home.

And CVS is looking to carve out its own position as the deal-making heats up.

“CVS doesn’t want to sell us just prescriptions and toothpaste; it wants to be our primary care provider,” said Erik Gordon, a professor at the University of Michigan’s Ross School of Business. “With stores that are convenient to many of us, it is going to be a big player.”

Article source: https://www.nytimes.com/2022/09/05/business/cvs-signify-health.html