5 Tech Upgrades CVS is Making in Its Quest for Customer Centricity
CVS Health will continue to invest in its tech infrastructure as part of its plans to deliver more personalized and localized health care services.
The company also announced a series of leadership changes.
Highlights were provided during a recent investors’ call, in which the company revealed four-quarter revenues increased 22.9% to $66.9 billion, and full-year revenue increased 32.0% to $256.8 billion, primarily driven by its acquisition of Aetna in November 2018.
To continue on its growth trajectory, two of the company’s four transformation priorities include creating a consumer-centric technology infrastructure and modernizing its enterprise functions and capabilities. These include the following strategies:
1. CVS Health is developing centers of excellence for data and robotics that Jonathan Roberts, executive vice president and COO, said will deliver higher levels of service at lower cost.
2. The company is moving to a hybrid cloud environment to lower costs and significantly reduce the time to build and deploy new capabilities.
3. It’s streamlining the number of applications used across the enterprise.
4. It’s optimizing call centers with artificial intelligence, natural language processing and robotics. As part of this, the company will first reduce the number of vendors it uses, and then focus on digitizing its manual processes.
5. Advanced data and analytics will be leveraged to enhance workforce-management tools for improved scheduling.
The company is expanding its rollout of its HealthHub concept, in which 20% of a store’s sales floor is converted into an area for consumers to receive healthcare treatment, take classes and seminars, and receive assistance with insurance navigation. CVS first piloted the HealthHub concept last year, and it intends to have up to 1,500 locations in the U.S. by the end of 2021.
Thanks to higher margins from health and wellness, locations with HealthHubs are seeing positive growth in the sales and margins for the front of the stores.
“There is an opportunity to expand that to all stores, and we have different formats depending upon volumes and geographies that stores are in,” said Roberts, who added, “We are feeling really good about the shape that these stores are in and our ability to continue to grow.”
Larry Merlo, CVS Health president and CEO, said consumers are also engaging more often with the company through its apps, online and text messaging.
“We’re seeing higher rates of satisfaction and loyalty from our digitally engaged consumers,” he noted.
Finally, CVS announced a series of leadership changes:
Derica Rice, executive vice president and president, CVS Caremark, will depart CVS Health. He will remain with the company through February. Alan Lotvin, M.D., executive vice president at CVS Health, takes his place, with additional oversight of CVS Specialty and CVS Kidney Care.
Jonathan Mayhew has been appointed executive vice president, transformation. He was previously senior vice president for Aetna Markets.
Alec Cunningham has been appointed executive vice president and COO for the Aetna business. She joined CVS Health last year from Concerto Healthcare.