Putting Health First

CVS Health (NYSE: CVS) employees are united around a common goal of helping people on their path to better health. The company is evolving based on changing consumer needs, meeting people where they are, whether that’s in the community at one of its nearly 10,000 local touchpoints, in the home, or digitally – in the palm their hand. Its newest offerings—from HealthHUB® locations that are redefining what a pharmacy can be, to innovative programs that help manage chronic conditions—are designed to create a higher quality, simpler, and more affordable experience.

  • Ranked #5 on the 2019 Fortune 500 list
  • Market cap of ~$84 billion as of June 2020
  • Largest pharmacy in the U.S. based on total prescription revenue as of June 2020
  • 2.8 billion adjusted prescriptions* filled or managed annually
  • 1,100 walk-in medical clinics as of Q2’2020
  • An estimated 34 million people served through health insurance products and related services
  • 4.5 million customers served by CVS Pharmacy stores daily
  • Approximately 103 million PBM (pharmacy benefit manager) members 

Advisor Access spoke with CVS Health’s Executive Vice President and Chief Financial Officer Eva Boratto.


Advisor Access: Please give readers a brief summary of CVS Health’s business philosophy in these changing times.

Eva Boratto: CVS Health has embarked on a journey to fundamentally transform the way care is delivered in the U.S., guided by our mission of helping people on their path to better health. We have assembled a diverse and complimentary suite of assets that, taken together with our vast experience and healthcare expertise, are driving forward our goal of making care local, simple, and more affordable, meaningfully impacting the lives of those we serve.   

AA: COVID-19 has presented many challenges. How has your strategy evolved in light of the pandemic?

EB: Our strategy centers on meeting people where they are in what we have coined “the triad of care”—in the community, at home or digitally—in the palm of their hand.

COVID-19 called upon us to deliver essential services, create new solutions and make them accessible in non-traditional settings alongside our unmatched community touchpoints.

Through this pandemic, we saw a reinforcement and acceptance of care being delivered in multiple, non-traditional settings, and a validation of our omni-channel approach to health.

As a result, we bent our innovation curve markedly, accelerating several aspects of our care delivery to meet the emerging consumer demand through our home delivery, diagnostic testing, virtual care and in-home health care services.  All of our services have been supported by a digital platform where we continue to innovate to create a more positive experience for our consumers.


AA: CVS played an important role during COVID-19 getting the population tested. How substantial an opportunity is testing expected to be?

EB: We are proud to have been able to quickly and effectively respond to consumers’ needs during the pandemic. We were able to accelerate aspects of our long-term strategy, including diagnostic testing.  We believe this is a significant and enduring opportunity when you also consider the need to administer significantly more seasonal flu vaccines in addition to the COVID-19 vaccines.

We set up the largest COVID-19 testing platform in the nation and have administered over 3 million tests to date.  As of July, we operated community testing sites at over 1,800 CVS drive-thru locations with over 50% in communities with a significant need for support according to the CDC’s Social Vulnerability Index.  In September, we announced plans to double our sites to 4,000.

For our plan sponsors, we launched our B2B Return Ready℠, COVID-19 comprehensive testing platform to help our clients execute return to worksite strategies. Interest has been high, with 45 clients enrolled as of August, and we have a strong pipeline of demand of over 1,000 prospects.  

We launched diagnostic testing for seniors in long-term care facilities, which continues to be critically important in protecting a very vulnerable population.

As part of our comprehensive testing approach, we launched a new digital platform to assist with registering COVID-19 patients for clinical trials as vaccines and therapeutic treatments are developed.

We view our new diagnostic testing services as a natural extension of our clinical, data and analytics capabilities and expect to derive sustainable value for our enterprise as we move forward.

Today, we stand ready to administer 18 million seasonal flu vaccines and we are also well positioned to administer COVID-19 vaccines once they become available through our community locations and on-site through our Return Ready℠ and long-term care solutions.

AA: HealthHUB® locations are a critical component of your long-term strategy. How are they performing, and what can you share about their resonance in the marketplace?

EB: Our HealthHUB® locations are a key component of our transformational strategy as we expand our health services offerings along the continuum of care from wellness to chronic care. Our goal is to improve access, health outcomes and lower medical costs.

Our HealthHUB® performance in Houston, our first market vs. the control group (other non-HUB Houston area locations) has been favorable. Net promoter scores that measure customer satisfaction and a willingness to recommend have been positive.  Importantly, in Q2’20, we reported a 15% increase in HealthHUB® visits associated with chronic services, with the most significant use from Aetna-insured members.  We also saw the number of scripts filled in our HUBs increase and our Front Store has outperformed expectations.

Despite the challenges this year with COVID, the value our integrated model can deliver is manifesting itself in tangible ways. In our Aetna National Accounts, as of Q2’20 we had sold 4 times more pharmacy members this year than we did last year. In our PBM segment, there is tremendous interest from our plan members who are looking to better connect with their members.

As we approach a significant flu vaccine season this fall, our diagnostic and testing capabilities, coupled with our community presence and the HealthHUBs, position us well to be able to deliver critical services across the nation.    

We are very encouraged by the interest in our integrated capabilities and on track to have ~1,500 HealthHUBs operational by the end of 2021.

AA: What are some of the services clients and members can receive at the HealthHUBs?

EB: Our HealthHUBs are tailored to the demographics of the communities we serve and are equipped with an array of services including a care concierge to help members understand their health plan benefits and determine their best health care options. HealthHUBs also include private pharmacy consult areas, wellness rooms, health equipment and products, medical devices, as well as nurse practitioners and pharmacists. In 2021 we will be enhancing our service offerings around behavioral health with the addition of social workers.

Our ability to integrate medical with pharmacy information allows for the deployment of personalized care plans and outreach to guide customers to the right care and at a lower cost. The power of this data enables the work we are doing through Pharmacy Panels and Aetna’s Next Best Action program, which target chronic disease management and close gaps in care.  Our early results are promising. We have seen unnecessary Emergency Room visits down 12% along with an 8% reduction in out-of-network and non-preferred provider utilization. 

Very recently, we announced the launch of Aetna Connect in Kansas, a first-of-its kind plan for our Medicare members that utilizes our combined assets across Aetna and CVS while benefiting from our community assets. 

COVID-19 has placed an emphasis on virtual care. We have seen a significant uptick in demand from our expanded suite of offerings, providing access to care for our Aetna-insured members through MinuteClinic® video visits for consultations with physicians and through our own virtual care program called E-Clinic with our nurse practitioners and other health professionals.

As of Q2’20, our total MinuteClinic virtual care visits were up over 750% compared to the prior year.  

AA: What are some of the trends in consumer behavior from COVID-19 that you expect to be long-standing and how is CVS Health positioning itself to capitalize on them?  

EB: The pandemic has reshaped how we live, work and interact with one another. It has also changed our expectations and needs.

We think several trends are here for the long run:

  • We anticipate a significant change to how care is delivered.  We believe strongly that while virtual care and online services address important needs, there remains a need for local, in-person health care.  Our strategy balances these needs.  We are uniquely positioned to deliver care in the community, in the home and digitally—in the hand.
  • Services traditionally done in urgent or primary care settings will shift to lower cost of care settings.  Our community presence is core to our strategy of delivering solutions and value that meet the needs of all the stakeholders we serve.
  • Telemedicine platforms will evolve to include personalized information and advanced diagnostics and we offer those solutions.
  • Given the rise in mental health issues, we expect more health care practitioners to integrate behavioral health in their patient care plans and we are focused on total wellbeing and offer holistic care.
  • The future will involve engagement through multiple channels and at CVS Health, we are working on giving our consumers options to engage with us.
  • And finally, consumers and employers will expect different health solutions and coverage and we are positioned to continue to innovate and provide them as their needs evolve.


AA: A year from now, with COVID hopefully behind us, what will CVS Health be focused on?

EB: Our discussions will be centered on our progress in delivering enterprise wide integrated health care solutions, resulting in improved top and bottom line financials and metrics that show how we are creating value through out integrated strategy.  Investors will also continue to see us deliver on our cost savings initiatives, integration targets and transformation initiatives, which remain top priorities.

Looking at our businesses, maintaining above-market growth in our Government programs remains a priority for us as well as continuing the momentum in our community locations offering expanded health services, focusing on our pharmacy benefits and our growing Specialty Pharmacy capabilities.

We are committed to reducing our debt and meeting our leverage target in 2022 which will enable us to have more flexibility to address how we can deploy our capital and return more value to shareholders through dividends and share repurchases.

We are confident in the value proposition we offer derived from the strength of our trusted healthcare brand, our unmatched consumer touchpoints, and the unique combination of assets and expertise to meaningfully improve the way health care is delivered across the country. 

AA: Thank you, Eva.

*Converts 90-day prescriptions to the equivalent of three 30-day prescriptions.


Eva C. Boratto currently serves as Executive Vice President and Chief Financial Officer of CVS Health. In this role, Ms. Boratto is responsible for all aspects of the company’s financial strategy and operations, including accounting and financial reporting, investor relations, mergers and acquisitions, treasury and capital planning, investments, risk management, tax, budgeting and planning, and procurement. Most recently, Ms. Boratto was Executive Vice President, Controller and Chief Accounting Officer for CVS Health, responsible for leading the overall financial reporting for the company, underwriting and contracting for various aspects of the business, and the financial planning, analysis, and operations functions of CVS Health. Previously, Ms. Boratto served as senior vice president and chief accounting officer from 2013 to 2018. She joined the company in 2010 as Senior Vice President, Finance, for Caremark.
Ms. Boratto has an extensive financial background that spans more than three decades and includes numerous senior-level positions in the retail, managed care, and pharmaceutical industries. Prior to joining CVS Health, she served in a number of executive positions at Merck & Co. Inc., an international pharmaceutical company, including as Vice President, U.S. Market Finance Leader, where she was responsible for financial oversight of Merck’s U.S. pharmaceutical market. She serves on the board of directors for UPS.


 Analyst Commentary

“CVS [is] a key player in the COVID-19 solution, whether it be testing (CVS performs more COVID-19 molecular tests than any other retailer), helping with COVID-19 clinical trials, supporting nursing homes with testing capabilities, or adapting to consumers’ changing needs. More importantly, CVS expects to be a key player in the administration of the COVID-19 vaccines.”

— Ann Hynes, Mizuho Securities
Sept. 21, 2020

“Leveraging off of its PBM offerings, as well as by offering insurance products that integrate its retail capability (including HealthHUBs and MinuteClinic), CVS has seen stronger than expected membership growth.”

— A. J. Rice, Credit Suisse
Aug. 7, 2020

“We expect the longer term focus to remain on execution, and CVS’ ability to deliver ongoing progress on key initiatives . . . Importantly, management believes the current environment is accelerating its transformation and providing new opportunities around [the company’s] integrated offering.”

— Lisa Gill, J.P.Morgan
Aug. 6, 2020

“The [healthcare] juggernaut executes through COVID and toward 2022 targets . . . we see CVS as working to cost-effectively solve some of healthcare’s biggest care provision challenges.”

— Elizabeth Anderson, Evercore ISI
Aug. 5, 2020

“We continue to see CVS as executing well on its vertical integration strategy despite the challenge of the COVID pandemic.”

— George Hill, Deutsche Bank
Aug. 5, 2020


Investors and others should note that CVS Health, Inc. posts important financial information using the investor relations section of the CVS Health website, cvshealth.com, and Securities and Exchange Commission filings.
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The material, information and facts discussed in this report are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. This is not an offer or solicitation of the securities discussed. Advisor-Access LLC and/or its employees, contractors and owners, may purchase or sell the securities mentioned in this report from time to time. Any opinions or estimates in this report are subject to change without notice. This report contains forward-looking statements under the federal securities law. These statements are based on current expectations, estimates and projections about the industry and markets in which CVS Health. operates, management’s beliefs, and assumptions made by management. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. The securities discussed may involve a high degree of risk and may not be suitable for all investors. CVS Health has paid Advisor Access a fee to distribute this email. By clicking on any of the links in this email you agree that your contact information may be shared with CVS Health. Eva Boratto had final approval of the content and is wholly responsible for the validity of the statements and opinions.

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