CVS Health, with a market capitalization of close to $132 billion, owns CVS retail pharmacy stores (9,900+), CVS Caremark which acts as a pharmacy benefits manager, and Aetna, a healthcare insurance provider acquired for $78 billion in 2018. CVS is no stranger to the use of big data and leveraging data analytics and artificial intelligence to enhance the services it offers its customers. In fact, out of 5 strategic imperatives that shape the organization’s directions, 2 are directly related to the use of data to drive performance.
The numbers speak for themselves: In 2021, CVS had 40 million unique digital customers, >75 million active ExtraCare members (loyalty program) and 5.6 million CarePass members (paid health and wellness subscription platform). To drive home the importance of data and digital transformation in the healthcare industry, CVS devoted $3 billion in 2021 towards investments in technology and digital and hired a new chief data, digital and technology officer in the summer of 2022. Moreover, CVS has also built up an impressive team of data scientists, employing about 900 of them, key to staying ahead in the healthcare space as companies such as Amazon start encroaching on the sector.
Through continued investment and following the Aetna acquisition, CVS has been able to scale its virtual care platform, which came in incredibly handy during the COVID pandemic as telehealth services boomed overnight. In 2021, CVS had 19 million virtual care visits. CVS as an integrated healthcare provider allows the company to gather data not only on what customers purchase at retail stores, but access to information on prescriptions, refills, as well as claims data through Aetna’s insurance services, all crucial pieces of information to develop a well-rounded patient picture and be able to target customers’ holistic healthcare needs.
There are several areas where CVS has focused its efforts regarding digital and data:
- Patient adherence to medication regimes in order to improve patient outcomes -Through the use of data analytics and predictive models, CVS is able to identify which patients are likely to stop taking their medication as prescribed and focus outreach programs on those patients.
- Healthcare personalization – CVS is able to integrate data from prescriptions, physician visits to its MinuteClinic and integrate them to deliver personalized recommendations, reminders, etc through its mobile application/website to registered users thus driving higher engagement. CVS has proven that customers who are engaged through digital channels face lower medical costs due to personalized data insights.
- Optimization in operations – Through the use of AI, CVS has been able to automate certain processes such as specialty pharmacy script which has helped to eliminate over 30 manual steps. Another example is reducing the idle time for both patients and physicians at MinuteClinics through better scheduling tools leveraging AI.
As competition in the healthcare space heats up with new digital healthcare startups and even big tech players such as Amazon eyeing the sector, CVS appears to be well positioned to remain a relevant player and add value to patients in the US. CVS has understood the future of healthcare will continue to shift towards leveraging digital tools to enhance patient care and is clearly devoting both significant budget as well as human capital to this end. Beyond the tangible benefits outlined above on CVS specialty and pharmacy services, CVS also has developed capabilities it can continue to reap benefits from regarding data on consumer behaviors in other parts of the store. It is sitting on a gold pot of over 75 million ExtraCare members and able to identify purchasing patterns and better able to potentially move certain products in their stores. However, the road ahead presents opportunities but also challenges. Increasing scrutiny over data protection and privacy as well as ethics related to AI may pose challenges as CVS continues to develop its data capabilities and implement machine learning / AI in other processes in its operations.