Cvs Health CVS

CVS Health Corporation is a leading health solutions company that builds a network of health services around each consumer it serves. It operates approximately 9000 retail locations, more than 1000 walk in and primary care medical clinics and a leading pharmacy benefits manager with about 87 million plan members. The company also offers health insurance products to more than 37 million people through traditional voluntary and consumer directed plans including Medicare Advantage and Medicare Part D. Its integrated model aims to improve access to quality care while lowering overall health care costs.

The company generates revenue primarily from insurance premiums collected by its health benefits business. It also earns fees for pharmacy benefit management services including prescription drug network management and specialty pharmacy operations. Revenue comes from the dispensing of prescription drugs through its retail pharmacy network and from the sale of health and wellness products in its front store offerings. Additional income is derived from medical clinic visits home health evaluations and value based care arrangements.

The company operates through the following segments: Health Care Benefits Health Services Pharmacy and Consumer Wellness and Corporate Other.

• The Health Care Benefits segment offers a wide range of insurance products including medical dental behavioral health and vision plans. It provides commercial medical plans such as point of service preferred provider organization health maintenance organization and indemnity options as well as health savings accounts and consumer directed health plans. The segment also manages government programs like Medicare Advantage Medicare Part D prescription drug plans Medicare Supplement plans and Medicaid and CHIP services. It serves members through employer groups government sponsored plans and individual purchases and provides administrative services for self funded arrangements.

• The Health Services segment runs the pharmacy benefit management business through CVS Caremark offering plan design formulary management and network services. It operates specialty and mail order pharmacies that dispense high cost medications for chronic conditions. The segment provides medical clinic services via MinuteClinic and virtual care and delivers in home health evaluations through Signify Health. It also operates value based primary care centers via Oak Street Health and offers clinical programs such as disease management medication adherence and employer wellness services.

• The Pharmacy and Consumer Wellness segment operates roughly 9000 retail locations that dispense prescriptions and sell over the counter health beauty and personal care items. It processes about 1.8 billion prescriptions each year on a thirty day equivalent basis and supplies prescription fulfillment services to the Health Services segment. The segment also runs infusion and enteral nutrition sites and provides immunizations and health screenings in store. Revenue comes from prescription sales and front store merchandise with pharmacy contributing the largest share of its income.

• The Corporate Other segment includes the company’s corporate functions such as executive management legal compliance human resources finance and information technology. It also covers acquisition related integration costs and the management of legacy products like large case pensions and long term care insurance. This segment does not generate significant external revenue but supports the operating units.

CVS Health Corporation ranks among the largest health care companies in the United States competing with large national managed care organizations in the insurance arena. In pharmacy benefit management it faces rivals such as Express Scripts and Optum Rx. Its retail pharmacy business contends with chains like Walgreens Walmart and independent drugstores. The company’s competitive strengths lie in its integrated model that combines insurance pharmacy services and clinical care under one organization. This integration enables better care coordination data sharing and cost management that many standalone rivals find difficult to replicate.

The company serves a broad mix of customers including employers that offer health benefits to their workers. It also provides insurance coverage to individuals through government programs such as Medicare and Medicaid and through private market purchases. Pharmacy services are delivered to health plans pharmacy benefit managers and government agencies that manage prescription benefits. Retail stores attract individual consumers seeking prescriptions over the counter products and everyday convenience items. The federal government is a significant customer through its contracts with the Centers for Medicare and Medicaid Services.