It was an expensive year for drugstore pharmacy chain and healthcare payer and delivery services company CVS Health Inc. in 2018.
That’s mainly reflective of CVS’s $67 billion acquisition of health insurer Aetna in December. But heavy acquisition aside, CVS will continue to spend heavily on digital healthcare technology, CVS executive vice president and chief financial officer Eva Boratto told Wall Street analysts on the company’s recent year-end earnings call, according to a transcript from SeekingAlpha.com.
Next year CVS will spend between $325 million and $350 million on various types of technology as it aims to transform a network of about 9,700 stores into healthcare shopping and services facilities.
“Investments are being made to further our analytics and digital capabilities, develop new programs such as chronic kidney care, and enhance Aetna’s clinical platform,” Boratto told analysts. “We expect our incremental investment spending to be between $325 million and $350 million in 2019.”
CVS was somewhat vague on its year-end earnings call about specific details, but a big priority is mobile commerce and offering consumers more mobile access to healthcare services such as telehealth.
“I would put that spending into two large buckets,” she said. “Supporting transformation—it includes investment in our clinical platform to more effectively engage members, our chronic care initiatives, and other initiatives aimed at improving outcomes and lowering costs.
The next area for big investment is digital healthcare. “The other area that we’re continuing to invest in and expand our investment is digital and improving the digital and mobile experience for members and customers across all of our businesses, and we’re making investments in our health cloud software platform,” she told analysts.
In 2018 CVS rolled out several healthcare ecommerce and omnichannel initiatives. CarePass includes free delivery on most medications and purchases, access to a 24/7 pharmacist hotline and 20% off all CVS Health brand products.
CVS is currently piloting Care Pass at its 350 drugstores in and around Boston. Customers can join CarePass for $5 a month or $48 a year and receive a monthly $10 CarePass promotional reward that can be used toward nearly all purchases in-store and online at CVS.com, CVS says. The CarePass program, which CVS says it will expand to other markets without detailing when or where, is the latest in a series of recent moves to beef up customer loyalty and add more services.
In December, CVS rolled out same-day prescription delivery in New York and in June expanded service to Boston, Miami, Philadelphia, San Francisco and Washington, D.C. In these cities, customers have the option to choose same-day delivery for a one-time cost of $8.99. All orders placed by 4:00 p.m. local time are delivered within hours, by 8:00 p.m., Monday through Friday. On Saturday and Sunday, orders received by 11:00 a.m. are delivered by 4:00 p.m., CVS says.
CVS Pharmacy, the retail pharmacy division of CVS Health, also is rolling out additional delivery options for its stores and mobile app. CVS Pharmacy customers nationally can now opt to have their prescriptions delivered to their home, rather than going to the store to pick them up. Customers can place orders for one- to two-day prescription delivery service through the CVS app or by calling their local CVS store. The delivery service charge is $4.99.
With CarePass, in addition to extra product discounts and loyalty points, CVS customers in Boston that sign up also get free one- to two-day delivery on qualifying prescription drug orders with home delivery through the U.S. Postal Service.
“Applying new technologies will be a component of our consumer centric approach to improving health, CEO Larry Menlo told analysts.
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