With pandemic, CVS sees big business opportunities with Covid-19 testing, flu shots
- CVS Health has rolled out thousands of Covid-19 test sites and launched a new business-to-business testing program.
- It's also gearing up for flu shots, which will crucial to help medical professionals as they cope with the spread of the coronavirus.
- CVS Chief Executive Larry Merlo said about 40% of people tested at CVS pharmacies are new customers.
As the pandemic makes health care top of mind for many Americans, CVS Health said Wednesday that it's focused on providing services that are in high demand from flu shots to testing for colleges.
The company has opened more than 1,800 drive-thru sites for Covid-19 testing. It's launched a new business-to-business testing program for corporations and colleges. And it's getting ready to administer flu shots, which could keep people healthy as doctors and nurses cope with the spread of the coronavirus.
"Those of you who have been following us for some time know that CVS Health is much more than just your corner drugstore," CVS Chief Executive Larry Merlo said in an earnings conference call Wednesday. "And in this era of Covid, our strategy of diverse assets across health care, this triad of care where connections are delivered in the community and home and in the palm of your hand could not be more important."
The pandemic has changed Americans' habits, including the way they get medical care. CVS stores filled fewer prescriptions and saw a drop in front store revenue during the fiscal second quarter as people skipped shopping trips and doctor's appointments during shelter-in-place orders. However, the company's operating income shot up for its health benefits business as people delayed elective procedures and other medical care.
The company also noticed a shift in customer mix for its health benefits business because of the pandemic's economic fallout. CVS Chief Financial Officer Eva Boratto said its Medicaid members grew and its commercial members shrank as companies laid off and furloughed employees.
Yet, at the same time, the pandemic has created opportunities for CVS to raise its profile and reach new customers. The company reported better-than-expected revenue and earnings for the second quarter and raised its outlook for the year.
At of the end of July, CVS had administered about 2 million Covid-19 tests, Merlo said. About 40% of those tested were new pharmacy customers.
"We're now connected with them digitally, with the objective of making them long-term CVS customers," he said.
Its business-to-business testing solution, called Return Ready, has attracted over 40 clients, including universities and corporations, and has over 1,000 prospective clients in the pipeline, he said.
As flu season approaches, Merlo said the company plans to play a large role, too. He said he expects to see huge demand for vaccines, fueled by public service announcements. Public health officials are urging Americans to get the shots to reduce confusion between Covid-19 and the flu, which can have similar symptoms.
Flu shot manufacturers plan to provide a record number of vaccines this year.
Merlo said "the seasonal flu vaccine is never going to be more important."
He said the same digital system patients have used to schedule the majority of Covid-19 tests at CVS locations could also be used to stagger customers and reduce wait times for flu shots.
And, he added, CVS plans to roll out Covid-19 vaccines when those are ready, too.
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