The retail giants are getting — either indirectly or directly — into home-based care.
That matters, because if they didn’t firmly believe in it, they wouldn’t be paying any mind to it at all.
“We’re a $270 billion company. … You have to pick what you’re going to spend your time on,” Alan Lotvin, the executive vice president of CVS Health, said at the HLTH conference Sunday. “To quote Steve Jobs, ‘The hardest part of what I do is trying to figure out what not to do,’ because all of these things are super interesting, exciting and fun. It’s just hard to say what’s going to move the needle enough.”
If one uses deductive reasoning, then, it’s clear that CVS Health (NYSE: CVS) cares a whole lot about home-based care.
The aforementioned response was prompted by a question about successful digital health companies such as Ro, GoodRX, Hims and others, and why CVS Health hadn’t started similar lines of business itself.
While the American health care company has not yet found the time or resources to create those sorts of platforms, it has with home-based care innovation.
After all, the behemoth has allotted plenty of resources toward home- and community-based care over the last couple of years, creating what it considers “a home health hub” of sorts.
“Our transformation over the last decade has enabled us to become the nation’s leading diversified health services company,” Karen Lynch, the president and CEO of CVS Health, said on the company’s 2020 Q4 earnings call. “Our presence in communities across the country allows us to meet consumers where they are and become a bigger part of their everyday health.”
Last April, CVS Health partnered with UCLA Health to enhance its in-home capabilities related to home infusion services. Then, early on in 2021, it partnered with the Cancer Treatment Centers of America (CTCA) to offer in-home chemotherapy to cancer patients.
It’s not done, either. In fact, partnering with home-based care agencies themselves has even been something the company has recently considered, Adam Pellegrini, the SVP of enterprise virtual care and consumer health at CVS Health, told HHCN in February.
“We’re open to all those types of discussions, for sure,” Pellegrini said. “Right now, we’re just really getting user feedback, looking at all the different ways that we can work with our partners. The idea here is to keep seniors safe in the home. … I think COVID has accelerated some of our original thinking.”
In July, Business Insider reported that CVS Health had turned down Amazon (Nasdaq: AMZN). Specifically, CVS had told Amazon it would not pay for Amazon Care, Amazon’s own at-home and virtual care service.
That could have meant a lot of things. It could just be that Amazon — which does not move slowly — had not yet built up enough capabilities or resources to warrant payment from CVS Health or its insurer, Aetna, yet.
But it also could have been because CVS Health has plenty of innovative, at-home care solutions on the horizon as well. The thinking would be, then, why pay for someone else’s services when you have your own?
It certainly doesn’t seem as if it was CVS Health scoffing at Amazon’s proposal.
“Underestimate Amazon at one’s own peril,” Lotvin said Sunday. “That would be an obvious statement. I’m sure that they can [build a lot of things], the question is always going to be, ‘How do you break into the big leagues?’ And I don’t mean that disparagingly.”
Lotvin was referring to the larger insurers and health care giants, such as itself, Anthem (NYSE: ANTM) and Walgreens (Nasdaq:WBA), among others.
He also mentioned that, if he were to start a new company today, he would likely enter into medical devices or try to create some sort of platform that could integrate all the different health care services right now into one.
“On the digital health side, I probably would think about plumbing. And what I mean by plumbing is, in health care, there’s nothing that works easily,” Lotvin said. “So are there tools or capabilities that you could build where companies could purchase something that would improve the member and consumer experience to make it frictionless?”
An example of this concept is the mobile on-demand health care startup Sprinter Health, which announced a $33 million Series A round on Oct. 13, with Andreessen Horowitz (a16z) acting as lead investor.
That insight could give a look into what Lotvin plans to do with CVS Health: creating a more all-encompassing health care company that can do a range of things for the consumer, including providing them with in-home care services.
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