In December, CVS Health (NYSE: CVS) shared its strategy for “revolutionizing” the consumer experience through its primary care, payer, digital and omnichannel health services offerings, including home health care.
President and CEO Karen Lynch doubled down on that agenda while speaking at the 40th Annual J.P. Morgan Healthcare Conference Tuesday morning.
“As I said in December, everything about our vision starts with health care for consumers,” Lynch said. “We are very focused on helping people navigate the health care system and their personal health care by improving access, lowering costs and becoming a trusted partner.”
The Woonsocket, Rhode Island-based CVS Health sees itself as an established leader in the most critical parts of the health care sector, with its main strategic advantage being its various touch points with consumers. About 100 million members are under the overall CVS Health umbrella, with roughly 4 million people walking into its brick-and-mortar stores – or “community health destinations” – each day.
Its major assets include subsidiary Aetna on the payer side, plus its pharmacy solutions and CVS HealthHUB network, the latter of which offers seniors a range of services, from preventative care to acute care.
“No health care company has ever had the collection of assets that we have,” Lynch continued. “And with that comes an ability to dramatically reshape how consumers are experiencing their care. We do have an unmatched range of consumer touch points and different channels to meet health needs across the entire care continuum.”
The company’s leadership is so bullish on CVS Health’s near- and long-term plans that it also on Tuesday raised its full-year earnings outlook and affirmed prior guidance for 2022.
“We are making very bold moves and pivoting our strategy to really transform the way health care is delivered in America to lower cost, improve access and increase quality,” Lynch added.
Beginning with further investments into risk-based primary care models, CVS has a four-pronged plan as it continues to evolve into a multifaceted health care organization. Its immediate objectives likewise include diversifying its growth portfolio with other new health services and exploring additional digital-health capabilities.
Finally, it’s enhancing its omnichannel health delivery network to give consumers more options in how and where CVS Health engages with them – and that’s where home health care enters the picture.
“We’ll also launch new payer and provider enablement services that will be integrated across multiple channels and address targeted health needs,” Lynch said. “This will include adding the risk-based management services functions necessary to move into risk-based primary care. Over time, we’ll expand our home health services capabilities that we offer in the marketplace, using a model that integrates health programs for complex populations.”
So far, CVS Health’s in-home care efforts have included a partnership with UCLA Health related to home-infusion services and a collaboration with the Cancer Treatment Centers of America (CTCA) to offer in-home chemotherapy to cancer patients. The company additionally has a large in-home kidney care department.
Its payer arm, Aetna, is similarly focused on the home.
“I think health care is at a new time, where we have to be inventive and have to put forward all those options,” Dr. Jamie Sharp, chief medical officer for Aetna Medicare, told Home Health Care News last month. “We have to break down barriers of traditional health care to make sure that our members don’t delay care and that they can stay as healthy as possible in their home.”
Arguably, CVS hasn’t made the same kind of splashy, home-based care investments as some of its peers, however.
Humana Inc. (NYSE: HUM) gained full ownership of Kindred at Home – the largest home health provider in the nation – last year. Walgreens Boots Alliance (Nasdaq: WBA), meanwhile, has invested $5.2 billion in VillageMD and $330 million in CareCentrix, both of which have a well-established in-home care foothold.
In other words, CVS Health has been dipping its toe in the home-based care pool. It now appears ready to take the head-first dive.
When it does decide to do that, it has plenty of firepower to work with, according to CVS Health CFO Shawn Guertin.
“The amount of deployable free cash that this business generates, I think, has been under-appreciated, maybe because some – all – of that cash for a long time has been going toward de-levering,” Guertin said Tuesday. “I think we’re going into a period here where we’re going to use that capital differently and drive a lot more value creation with that capital.”
In its 2022 guidance released on Dec. 9, CVS Health stated it expects cash flow from operations of between $12.5 billion and $13 billion.
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