Interview: How CVS Is Making Healthy Living Accessible To More Consumers, Part 1

Interview: How CVS Is Making Healthy Living Accessible To More Consumers, Part 1
Health

Executive Vice President, CVS Health and President, CVS Pharmacy, Kevin Hourican tells PSFK how the pharmacy retailer is meeting consumers' healthcare needs with offerings like in-store clinics, home delivery and virtual care

Piers Fawkes, PSFK
  • 24 september 2018

Consumer demands around healthcare are changing. While new start-ups and apps offer convenience and on-the-spot care and digital platforms allow consumers to manage their own health information, rising interest in wellness drives them to seek holistic solutions beyond traditional medicine.

Just before taking the stage at this year’s edition of Shop.org, Kevin Hourican, Executive Vice President, CVS Health and President, CVS Pharmacy, sat down with PSFK founder Piers Fawkes for a conversation on how the pharmacy chain plans to stay ahead of the curve in health and wellness offerings.

Piers Fawkes: Maybe you can just tell me about what you’re going to be talking about tomorrow [at Shop.org]?

Kevin Hourican: The first thing we’re talking about is the Power of Purpose in driving our company. We’re in the healthcare space: our purpose is helping people on their path to better health. What I’ll share with the room is how that purpose fuels the decisions that we make big and small.

A big example would be when we exited tobacco a couple of years ago. We’re the only ones that have in our space, shockingly. We believe passionately that you can’t sell a product that kills people if you’re in the business of helping people on the path to better health.

It must have been a huge decision.

It was a two billion dollar business—that excludes the other things they bought when they were in the store. That excludes the prescriptions that they may or may not have filled. We intentionally walked away from that two billion dollar business because, as our CEO said at the time, “It was the right thing to do.”

On a smaller level, we exited sun block product less than SPF 15, because it’s not effective. Some customers weren’t happy about that. But we know from research that SPF less than 15 just doesn’t work, and we’re not going to sell a product that we know doesn’t work. Those are in the front store of our business—meaning everything that’s not the pharmacy in the back.

In our pharmacy business, we invest $100 million per year, every year, to improve our clinical programs and to help our customers take their medications.

The second thing is an innovation pipeline. Retail’s not dead: bad retail is dead. The companies that are going out of business are ones that have lost their way on innovation, that didn’t have a differentiation of offering.

We believe that to be differentiated and have long-term consumer love for our brand, we must be continuously innovative.

Tell me more about the pharmacy business.

Yes. I’m the president of our retail business. We have an $80 billion retail business. It’s 60 billion pharmacy, 20 billion front. They both matter—20 billion by itself could be a Fortune 100 company. But we’re a healthcare company. Pharmacy is the business of our business.

The little space in the back is what makes all the money?

Essentially, it is the engine of our company. It is the fuel of our company and the purpose of what we do. When we say ‘helping people on their path to better health,’ the most important thing that we can do is to ensure they’re taking the medications their doctors are prescribing for them.

It sounds basic, but here are some interesting facts: a third of the people who have a medication prescribed for them will never take it. A third of the people who take it the first time won’t come back and take it again.

We work very hard to help people get started on therapy and to keep them on therapy.

Tell us about the omnichannel experience.

For many, coming to a CVS store is extremely convenient. We’re within five miles of 85 percent of customers, and many have the option of rapid home delivery. We’re the only retailer in the pharmacy business who’s delivering both front store and pharmacy product to their home nationwide.

Pharmacy is complicated. It sounds obvious: of course you should deliver to the home. But in pharmacy, there are regulations on what you can and can’t ship. There’s controlled substances, there’s cold chain product, which means they needed to be refrigerated and frozen. You need to be able to counsel the medication on the other end, on the delivery on how to take the medication.

We’ve built the capabilities of doing all of those things in compliant, regulatory approved ways. What we’ve learned is customers want a local relationship with their pharmacists. There are times when they want a prescription delivered to their home and where they are to be able to do both of that.

How did you identify what the company is going to focus on next?

Our purpose is helping people on their path to better health. We are healthcare innovators. It’s a continuous evolution.

The cigarette exit decision came from recognizing that selling them was definitely not connected to the purpose. Things we wanted to do as a brand and as a company to be a truly healthcare company wouldn’t have worked if we’re in that category. For instance, we’re in the process of acquiring a health insurer.

We couldn’t possibly have owned a insurance company if we sold a product that causes the highest cost for an insurer, who has to deal with the heart attack and the stroke and the unnecessary hospitalization and surgery and so on. We don’t want to drive insurance cost by selling a product that creates meaningfully negative health outcomes.

We have a business called MinuteClinic, which we have in a thousand stores. There, nurse practitioners in our stores are helping customers, while working in business collaboration with doctors. Fifty percent of the customers who come to the MinuteClinic actually don’t have a primary care doctor. Many times, that nurse practitioner helps solve that need of the day, but then is also referring that customer: “You really should have a primary care physician. I recommend the following practice.”

Those doctors would not want to be doing collaborative practice with a company that’s selling a product that harms people.

The MinuteClinic…Is that the video conferencing, NIH‑approved?

We just launched it, yeah. We now have online MinuteClinic. We’re in partnership with Teladoc, a new and small startup company. Teladoc essentially is the technology fuel behind connecting our patients to our nurse practitioners and enabling an even more convenient MinuteClinic offering.

In addition to online video MinuteClinic, we also have the ability—we just launched it last week actually—to answer an online questionnaire for select conditions. You don’t even need to do live FaceTime with a nurse. You can answer some basic questions and a nurse will review your chart and determine how they can help you. For some people, that’s even easier.

Our clinical professionals have determined which conditions are appropriate for that. I’ll give you the example. Things like hair loss, acne, and birth control. Erectile dysfunction we’ve not launched yet but we will eventually. Some people are embarrassed about these conditions. They don’t want to go to a doctor for them or they just don’t have the time. This MinuteClinic online and telehealth offering just enhances and moves the convenience bar that much higher.

Here’s what we think is our secret sauce. It’s yes, about innovation and technology that makes it easier and healthcare is local and the relationships that patients have with their local pharmacist matter.

What we believe makes us uniquely and well‑positioned is that we can bring both. We have pharmacists, a trusted healthcare professional who lives in the community of the customer, who can answer questions without an appointment and powered by technology, makes it even more convenient.

We don’t want to be a pure‑play startup. We don’t want to just be in our stores. We want to bring the best of both worlds together to help our customers to better health.

This was just the first part of PSFK’s discussion with Kevin—stay tuned to our newsletters and site for part two. For more about how companies like CVS are evolving for the future of health and wellness needs, see PSFK’s Retail Health & Wellness Debrief.

Consumer demands around healthcare are changing. While new start-ups and apps offer convenience and on-the-spot care and digital platforms allow consumers to manage their own health information, rising interest in wellness drives them to seek holistic solutions beyond traditional medicine.

+CVS
+Delivery
+Delivery & Logistics
+doctor
+Health
+Medicine
+merchandising & curation
+pharmacy
+post purchase & service
+retail
+retail wellness debrief
+Shopper education & assistance
+store experience & design
+Teladoc
+telemedicine
+wellness

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