Will CVS’s HealthHUB concept change what consumers expect of drugstores?

Discussion
Source: CVS Health
Feb 14, 2019
George Anderson

Since CVS made the dramatic announcement that it would no longer sell cigarettes in 2014, the drugstore chain has been focused on establishing itself as a healthcare provider. Now, CVS is looking to further ingrain that perception in the minds of consumers in the Houston area with the test launch of the chain’s first three HealthHUB concept stores.

“We believe that transforming the consumer health care experience begins with creating a new front door to health care,” said Alan Lotvin, chief transformation officer for CVS Health, in a statement. “Our new HealthHUB locations are just that — helping to elevate the store into a convenient neighborhood health care destination that brings easier access to better care at a lower cost.”

Each location will dedicate over 20 percent of its footprint to health services and products, including durable medical equipment (DME) and new product and service combinations for chronic conditions, such as diabetes and sleep apnea.

A primary feature of each location will be the Care Concierge, a professional tasked with engaging with customers in order to educate them about services offered on-site and to connect them with other providers. In early testing, CVS reports that 95 percent of customers have accepted help from the Care Concierge with half of those either interacting with a HealthHUB provider or taking advantage of a related offer.

Source: CVS Health

Each store will emphasize patient support programs to manage chronic conditions through its pharmacies and, where applicable, its MinuteClinic facilities. The nurse practitioners who staff the MinuteClinics will be given the space and resources to offer additional services such as screening for diabetes, phlebotomy and sleep apnea assessments.

The HealthHUB stores are equipped with digital kiosks and “Learning Tables” with iPads to help consumers do everything from taking their blood pressure to investigating various health. Each location also includes community spaces designed to host group events, from classes on nutrition to yoga.

CVS management believes that it can reshape how healthcare is delivered in the U.S. through the combined efforts of its drugstores, the Caremark pharmacy benefits manager business and Aetna, the health insurer acquired last November.

“What’s clear to us is that it will take more than incremental steps to fix what is broken in the healthcare system,” said Kevin Hourican, EVP, CVS Health and president of CVS Pharmacy. “That’s why we’re excited about how the combination of CVS and Aetna can begin to establish an innovative health care model that will create an entirely new consumer experience and help people on their path to better health.”  

DISCUSSION QUESTIONS: What do you see as the challenges and opportunities for CVS in operating its HealthHUB concept stores? Do you think the HealthHUB concept will change consumers’ expectations of what a drugstore experience should be? Will consumers be happier with the status quo?

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Braintrust
"This is an excellent step in the right direction towards making support for health needs more accessible—which we desperately need. "
"It will appeal to those who either have no or minimal health insurance looking for healthcare solutions at a low cost."
"It removes hassle from medical care to make it simple and convenient."

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9 Comments on "Will CVS’s HealthHUB concept change what consumers expect of drugstores?"


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Art Suriano
BrainTrust

I think this is a brilliant strategy for CVS. Though it will not be for everyone, it will appeal to those who either have no or minimal health insurance looking for healthcare solutions at a low cost. People today have become more health conscious, and we are all living longer because of it. So this ties in with the needs of today. Moreover, it’s a better direction for CVS than selling cigarettes. I would expect this to be successful and as other HBA/pharmacy chains are already going into healthcare services themselves, I would anticipate greater expansion as time progresses.

Neil Saunders
BrainTrust

There is definitely a demand for health services and CVS, with its extensive network of stores and its well known brand within the pharmacy space, is in an ideal position to respond.

That said, I think this is a real step change for CVS that will require a lot of effort and re-education of customers. For years, CVS has put little effort into the store experience, has degraded customer service, and has provided bad value for money on everyday products. To engage people around sensitive issues like healthcare, trust and brand equity need to be rebuilt.

Mohamed Amer
BrainTrust
Mohamed Amer
Independent Board Member, Investor and Startup Advisor
9 months 7 days ago

The HealthHUB concept by CVS will create a new retail category that combines healthcare, convenience, and access in a value-adding and compelling manner. The challenges for anything new are creating awareness and adoption, ensuring you deliver on the promises made, and maintaining a differentiated edge against emerging competitors attracted to the space.

The entire healthcare delivery system is ripe for change. CVS has the lead in anticipating consumers’ wishes for improved healthcare delivery with a brand they know and trust. Early success will require flawless execution in each HealthHUB and a feedback process to incorporate quick lessons into future store roll-outs while the company leverages its unique Aetna asset.
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Gene Detroyer
BrainTrust

Not only will this be a successful CVS endeavor, it will quickly be copied by Walgreens. We have seen the move by the drug chains to becoming neighborhood centers, moving away from just being pharmacies to being convenience stores. This is a next step.

While execution is always the key to success, the familiarity and comfort of the frequent visits to the store will make this a go-to place for simple healthcare solutions. It removes hassle from medical care to make it simple and convenient.

Laura Davis-Taylor
BrainTrust

I LOVE this and am so encouraged by the concept. My fiancée is an urgent care doctor and I’ve watched him go from an average of 40 patients to an average of 60 a day. The volume is crushing, and he struggles over not being able to give patients the time necessary to care for them but also EDUCATE them on better managing their health. This is an excellent step in the right direction towards making support for health needs more accessible—which we desperately need. And let’s be real, this category survives on pharmacy profits—so it’s serves their interest as well. It’s just doing so from a higher road. More please!

Ryan Mathews
BrainTrust

The challenges start with the potential for litigation and end somewhere in the future when a final, sensible healthcare delivery model finally comes to the United States. And it’s that second challenge that would keep me up if I were plotting this strategy. We don’t know whether the future of healthcare will look like a single payer, Medicare-like solution or a totally free market, but we do know something has to change in terms of pricing, services, and answering demand. If CVS’ bet is right, they could be a robust part of whatever that final solution looks like. If not, they could be dis-intermediated right out of the market. I think consumer expectations of chain drug operations are changing, but how far and how fast remain critical questions.

Richard Layman
Guest
9 months 7 days ago

My first job in DC was with a health-oriented consumer group. In an argument with people from there after I had left, we were discussing the then C. Everett Koop video project, done with a pharmacy chain maybe, I don’t remember which one. The guy I was arguing with about the failure of the videos said “it was because there was too much Koop.” I said “no, it is because the way chain drug stores are set up, they aren’t points for health information learning and dissemination, they are places to pick up drug prescriptions and sundries. So a pharmacy chain was the wrong partner and the wrong place to expect successful POS of such items.”

Now, CVS has the opportunity to change this. (Another example is the HyVee small supermarket format that mixes food + certain health categories, not just HBC, but senior care, maybe optical, etc.)

Fredrik Carlegren
BrainTrust

Yes, thank you CVS. This is like the Apple store for healthcare. It delivers convenient, customer-centric health insights and experiences to where those customers are already comfortable, where they already shop, and already fulfill prescriptions. While CVS may find a first-mover advantage, I can see others in the health segment attempt to copy this model so they will need to move quickly, adapt and refine the model to retain customers over time.

Oliver Guy
BrainTrust

Great to see CVS differentiating itself by providing a health related offering that is more than just dispensing. Dispensing has the potential of being disrupted in the next few years (regulations permitting) as things move to ultra convenience online only.

Challenges potentially will revolve around being seen as competition to a doctor’s surgery.

wpDiscuz
Braintrust
"This is an excellent step in the right direction towards making support for health needs more accessible—which we desperately need. "
"It will appeal to those who either have no or minimal health insurance looking for healthcare solutions at a low cost."
"It removes hassle from medical care to make it simple and convenient."

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