CVS Health (NYSE: CVS) is one of many large corporations that have expressed a desire to revolutionize the “consumer experience” in health care.
To do so, the company will continue to try to enhance its health service offerings in three categories: primary care, provider enablement and home health care.
CVS Health CEO Karen Lynch reiterated that plan Wednesday.
“We are expecting to enhance our health services in three categories: primary care, provider enablement and home health,” Lynch said during the company’s Q2 earnings call. “There are multiple pathways for us to make a mark on community health care and our ability to achieve our strategic goals. We have very specific criteria that we look at as we’re evaluating our many options. We look to see if there’s a strong management team, a very strong tech stack, the ability to scale and a pathway to profitability.”
Despite losing out to Amazon Inc. (Nasdaq: AMZN) on a bid for primary care player One Medical, Lynch said CVS Health plans to acquire or take a stake in a primary care company by the end of 2022.
“We can’t be in primary care without M&A,” Lynch said. “We are being very disciplined, both strategically and financially, as we pursue our M&A strategy. M&A can be very fluid. You don’t necessarily design exactly how these deals get done. We are committed to extending our health services and we are very encouraged and confident that we’ll take the next step on this journey by the end of this year.”
Other public primary care players that could be potential targets: CareMax, Cano, Agilon and Oak Street Health, among others.
CVS Health’s focus falls in line with other companies, like Amazon and Walgreens Boots Alliance (Nasdaq: WBA), that are becoming nontraditional primary care providers.
Nontraditional primary care providers could capture around 30% of the U.S. market in the next 10 years, according to a new report from Bain & Company.
“New primary care models from nontraditional players — such as advanced primary care providers, retailers and payers — aim to deliver more efficient care, improve patient outcomes, and lower costs,” the report read. “Payers, health systems and investors will need to make strategic choices to determine where to play and how to win over the next decade.”
CVS reported net income of $2.95 billion in Q2 of 2022, up from $2.78 billion year over year, a 6% increase.