CVS Caremark gets aggressive with PBM.
WOONSOCKET, R.I. —If you ask Tom Ryan, it’s more about the offer and the outcomes than it is about the price that is driving CVS Caremark’s PBM business these days. And that has the CVS Caremark chairman, president and CEO optimistic about the 2011 selling season.
“While it is still early, results to date are encouraging, and we are optimistic. The clinical strategies and value proposition are resonating with clients and consultants,” Ryan told analysts during the company’s first-quarter conference call on May 4. Ryan noted that CVS Caremark’s PBM business—which posted a 2.6% boost in revenues during the first quarter—has a fair amount of new prospects for 2011 and is in a “net positive position to date.”
With a Bloomberg BusinessWeek report published just days earlier that indicated CVS Caremark is challenging competitor Medco with aggressive pricing for 2011 health plan contracts, it came as no surprise that pricing was top-of-mind for a few industry analysts.
CVS Caremark declined to comment for the Bloomberg BusinessWeek article, but Ryan told analysts during the May 4 call that “from a pricing standpoint, we think the market is similar to what it has been in the last five to 10 years. It is competitive and aggressive, and, at the end of the day, clients want the right service and they want the right clinical programs that are going to lower their overall healthcare costs. So it is a balance between pricing and service.” Ryan reiterated that CVS Care-mark’s PBM business leverages a range of tools to reduce pharmacy and overall healthcare costs to clients.
Its Maintenance Choice program now stands at 494 plans, representing 5.6 million lives. Lives switching from voluntary mail plans to Maintenance Choice typically see a significant increase in 90-day utilization and substantial savings for clients and their members, as well as better adherence and better generic penetration, Ryan said.
With regard to the retail side of the business, Larry Merlo, EVP of CVS Caremark and president of CVS/pharmacy, told analysts that the company expects the second half to benefit from, among other factors, merchandising initiatives at the front end.
“We are in the process of rolling out our ‘urban cluster program,’ and that group of stores represents about 20% of our base. And we are improving the category assortment, hours of operation and the checkout experience,” he added. “At the same time, we are also doubling the consumables space in about half of our stores to take advantage of quick shopping trips.”
For the first quarter, net revenues increased to $23.8 billion, up from $23.4 billion in the year-ago period. Same-store sales rose 2.3%, pharmacy same-store sales rose 3.7% and front-end same-store sales slipped 0.7%. Net income attributable to CVS Caremark totaled $771 million, versus $738 million last year.
Retail clinics: Improved care at a lower cost
WHAT IT MEANS AND WHY IT’S IMPORTANT Retail clinics. Save. Money. Without regard to who’s footing the bill exactly — healthcare payer or Jane Patient — retail clinics not only represent a significant cost savings across the board, but by siphoning nonemergency-yet-still-urgent cases out of the emergency rooms and doctors’ offices, retail clinics also can contribute to improved care across the healthcare continuum.
(THE NEWS: Study: Retail clinics save nonemergency patients money. For the full story, click here)
All told there were 119.2 million total ER visits in 2006, up 8.2% as compared with 2004, according to ACEP. Extrapolate that figure with WellPoint’s finding that 19.4% of those visits may be for nonemergencies across the entire nation, and the fuzzy math equates to an approximate 23.1 million non-emergency patients presenting across some 3,833 ERs. For whoever is paying for the cost of care, that’s an expenditure totaling $10.2 billion if every case were to present at an ER; as compared to $1.2 billion if every case were to present at a retail clinic. That’s the cost savings piece.
But cost savings aren’t the only benefit retail clinics afford the overall healthcare system — there’s a general improvement in care. According to the American College of Emergency Physicians, average waiting times for patients triaged with non-emergency ailments at emergency departments range between one and two hours, but only when the ER isn’t crowded. That’s like saying that bee stings don’t hurt, you know, except when they do.
Let’s face it, in a nation of 309 million and counting, there are simply not enough points of care, be it for an emergency or nonemergency situation. Taking nonemergency visits out of emergency rooms would likely improve the efficiency of care for more critical patients, as well as the experience of care for noncritical patients. That’s the improved care piece.
Improved care at a lower cost, that’s what retail clinics bring to the table.
Tide brings Loads of Hope to Dollar General
NASHVILLE Tide brought its mobile laundromat to a local Dollar General to benefit victims of the recent floods.
Tide’s Loads of Hope program visited a Nashville Dollar General May 12 to provide customers in the area with clean laundry. One truck and a fleet of vans house more than 32 energy-efficient washers and dryers that are capable of cleaning over 300 loads of laundry every day. Tide washs, dries and folds the clothes for these families for free.
The Loads of Hope program also benefited victims of Hurricanes Katrina and Ike, in addition to other natural disasters.