CVS will close 900 stores in a major retail strategy shift
The company announced on Thursday that CVS Health is about to undergo major changes.
In the next three years, CVS Health plans to close 900 pharmacies and increase its efforts to redesign its retail locations to provide more comprehensive healthcare services. The company also operates Aetna Health Insurance and CVS Caremark Pharmacy Benefit Management subsidiaries, and announced related senior executive leadership changes.
CVS Health has not left traditional pharmacies behind. Although the number will decrease, the company is expanding Retail clinics exist Currently led by its MinuteClinics. Looking to the future, CVS Health envisions more websites where customers can access health and healthcare services in person or virtually.Store closures will result in impairment charges of between 1 billion and 1.2 billion U.S. dollars, and the company Report To the Securities and Exchange Commission.
A spokesperson said that CVS Health will weigh local market dynamics, demographic changes and local store density when deciding which stores to close. The company will also consider the number of Aetna and CVS Caremark customers in a region.
Karen Lynch, President and CEO of CVS Health, said in a statement: “We remain focused on the competitive advantages provided by our business in thousands of communities across the country, which complements our rapidly expanding digital business.” Press Releases.
Suzanne Delbanco, executive director of Catalyst for Payment Reform, said that CVS Health is responding to changing consumer needs and behaviors.
Delbanco said that as online orders and services have reduced passenger traffic, CVS Health may intend to get rid of operating unprofitable stores and invest resources to change the atmosphere and products of its other locations. She said: “This just reflects a broader understanding of what American healthcare consumers want and expect, especially after the pandemic.”
“This has the potential to provide a wide range of services to personal healthcare customers who may obtain insurance through Aetna, and to provide convenient services through CVS,” Delbanco said. “The ability of CVS and Aetna to share data about this patient may lead to better coordination and efficiency of care.”
RSM director and senior healthcare analyst Matt Wolf said that, more broadly, the repositioning of CVS Health’s retail strategy reflects a larger trend in the healthcare industry.
Wolf said that although physical location is still important for treatment, many healthcare companies are racing to overcome obstacles and deploy virtual care options to become the “Facebook or Amazon of healthcare.” “I didn’t feel [CVS is] Exit the market because they just removed some more redundant locations and shifted some of their attention and investment from physical existence to virtual existence,” he said.
CVS Health has taken a number of executive initiatives for its new plans for pharmacies and clinics. The company promoted Prem Shah to chief pharmacy officer, effective immediately. On January 1, Shah and current executive vice president and chief customer officer Michelle Peluso will become co-presidents of the company’s retail business.
Neela Montgomery, president of CVS Health’s pharmacy, will leave the company at the end of the year.