Understand how we got here — and how to move forward.


November 5, 2021

CVS is moving with 'speed and urgency' to disrupt primary care

Daily Briefing

    CVS Health CEO Karen Lynch on Wednesday announced that the pharmacy chain is looking to hire primary care doctors to develop physician-staffed primary care clinics, a move that Lynch said will be a priority for the company in the coming year, Sharon Terlep and Matt Grossman report for the Wall Street Journal.

    Primary care disruptors are growing—fast. What does that mean for service lines?

    CVS looking to hire primary care doctors

    This planned expansion into primary care builds upon CVS' prior acquisition of Aetna in 2018, which made it the first major health care company to be able to combine drugstores, insurance, and pharmacy-benefit management.

    According to Lynch, who took over as CVS' CEO in February, the drugstore chain is working with "speed and urgency" in creating primary care practices.

    "Primary care isn't a big medical cost but it wields a lot of influence" in lowering insurers' costs, Lynch said.

    "We really believe that we need to kind of push into primary care, so we can influence the overall cost of care," Lynch added. "And by doing that, we think that we can have better engagement, help customers better navigate and obviously have higher quality, lower cost of care."

    Primary care providers can be valuable for insurers for a variety of reasons, including the role they play in guiding patients away from high-cost specialists, imaging, and other services, and toward less-expensive forms of care, Terlep and Grossman report.

    According to Lynch, primary care providers influence the overall cost of care and can help "keep [patients] within our framework," including services offered by CVS.

    CVS isn't the first pharmacy chain to aim at becoming a health care provider, Terlep and Grossman report. Last month, Walgreens-Boots Alliance acquired VillageMD, a primary care network start-up, for $5.2 billion.

    Separately, CVS announced Wednesday that its retail sales increased 10% compared with last year, with Covid-19 tests accounting for about 40% of that increase. The drugstore also administered 11 million Covid-19 vaccines in the most recent financial quarter.

    CVS also said it hired a record number of employees in the most recent financial quarter, including almost 20,000 pharmacists, pharmacy technicians, and nurses.

    "Despite the tight labor market and anticipation of the higher demand for health services, we strengthened our workforce in every business," Lynch said. (Terlep/Grossman, Wall Street Journal, 11/3)

    Innovative disruptors in care delivery

    Get the research report

    Innovative Disruptors Market Landscape CoverThe ambulatory landscape is changing as new business models offer patients alternatives to mainstream primary care offices and emergency departments. Traditional provider organizations now face greater pressure to protect their outpatient market share as they compete with evolving alternative care delivery models.

    Download this report to understand who the innovative players in virtual care, concierge medicine, urgent care, and retail care are, why they’re attracting patients, and how they could impact your organization.

    Download now

    Have a Question?


    Ask our experts a question on any topic in health care by visiting our member portal, AskAdvisory.