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CVS digital strategies due to COVID-19 helped drive strong first quarter

Consumer-centric digital services could become the new norm, according to CEO and President Larry Merlo.

Susan Morse, Managing Editor

CVS Health's underlying core performance for the first quarter was strong, driven in large part by the company's consumer-centric digital strategy during the COVID-19 pandemic, CEO and President Larry Merlo said Wednesday during the earnings call.

The use of telemedicine for virtual visits through MinuteClinic was up 600% compared to the first quarter of 2019.

Retail prescription home delivery increased by more than 1,000%. In addition, CVS saw a four-fold increase in consumers adding front-of-the store items to their prescription deliveries.

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In specialty pharmacy, digital refills were up about 50%, Merlo said.

The Aetna Health app engaged more households in Q1 than in the first three quarters of 2019.

CVS opened large-scale COVID-19 testing sites across five states during the quarter and is establishing others, with the target of having testing in 1,000 locations by the end of May. Through May 4, the company had administered close to 90,000 tests with real-time results.


COVID-19 has sped up use of the digital experience and in particular, telehealth.

The digital experience due to COVID-19 could become the new norm, according to Merlo.

"And in conjunction with additional actions such as relaxing regulation, we are seeing a new normal emerge," Merlo said. "And in the near future, there will be an evaluation point of what worked and what didn't. And as a result, we expect that elements of today's new norm will become part of tomorrow's everyday routines."


CVS reported first-quarter net income of $2 billion, compared with $1.4 billion in the first quarter of 2019.

CVS's performance reflects an acceleration of prescriptions dispensed, strong front-store sales and a modest reduction in discretionary medical utilization, all largely driven by COVID-19, the company said.

Aside from the pandemic, Q1 results demonstrate the continued success of CVS's integrated healthcare strategy. This includes the addition of Aetna in 2018.

Medicare Advantage plan growth grew by 11.3%, outpacing the industry average.

CVS also saw Medicaid membership growth, driven primarily by the acquisition of IlliniCare. The strong government growth aligns with what other health insurers are reporting in Q1.

Commercial membership was down, primarily due to a decline in labor caused by the pandemic.


Given the likelihood of significant variability in the impact of COVID-19, CVS withdrew additional guidance for 2020.

All categories are expected to be down in April, after a peak in March, CVS said.

For example, Aetna saw a drop-off of around 30% in the use of healthcare services in April, as elective procedures were postponed, but the lack of current treatment could result in greater utilization later.


"When facing any health crisis, including this pandemic, we're uniquely positioned to understand consumer and patient needs and how to address them. This includes increasing access to medicine and virtual care, and testing thousands for the virus every day to ready our country to reopen safely," CVS Health President and CEO Larry J. Merlo said.

Twitter: @SusanJMorse
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