CVS is introducing a new format with senior clinics next to pharmacies

CVS Health is rolling out a new store format in several U.S. markets, including Oak Street Health’s senior-focused health centers “side by side” with a pharmacy, the health care company said.

What started as a pilot project in Houston last year is now embarking on a national expansion, starting with three locations in Chicago that are part of the approximately 25 Oak Street Health centers that will be next to a CVS pharmacy in new locations by the end of 2024. furnished former drugstores. format will be deployed in several other markets this year, including New York City, Dallas-Fort Worth and Columbus, Ohio. A further 11 of the new formats with Oak Street health centers and a pharmacy will open in 2025.

The expansion comes just over a year after CVS acquired Oak Street Health for $10.6 billion in cash, adding a large network of physician-staffed clinics used primarily by seniors. Beyond the new formats, Oak Street already has more than 200 standalone health centers in 25 states and continues to expand that model with 25 “standalone” Oak Street Health Centers planned for the remainder of this year.

“Linking these two powerful CVS Health assets advances the company’s strategy to deliver personalized healthcare experiences in a more integrated way, especially for older patients with complex or chronic health conditions,” said Mike Pykosz, who co-founded Oak Street and ran the company for more than a decade before selling it to CVS. He is now executive vice president and president of health care for CVS Health.

While the Oak Street health centers are open to Medicare patients who access through their health insurance plans, the on-site CVS pharmacies are open to the public, CVS executives said.

CVS’s expansion comes at a time when rivals are struggling in retail health care and primary care. Walgreens has closed dozens of physician-staffed clinics it opened with partner VillageMD, while Walmart has closed its 51 clinics. Walmart Health centers in five states. Last week, health insurer Humana announced that its healthcare company CenterWell plans to lease and open senior-focused primary care centers at 23 former Walmart Health clinic locations in Florida, Georgia, Missouri and Texas.

By 2026, CVS said Oak Street Health will have “more than 300 centers, each with the potential to contribute $7 million in Oak Street Health Adjusted EBITDA as the clinic matures.”

Like Humana, CVS Health owns a health insurance company. Thus, CVS Health’s ownership of Aetna allows the company to offer incentives through its Medicare health plans to entice seniors to use the Oak Street Health centers.

The idea is to offer seniors a range of primary care services, plus “behavioral health care, social support and Medicare education,” all in one location. Oak Street centers, which accept a range of health insurance plans beyond Aetna, also include a community space where seniors can gather for social activities and events.

In an interview earlier this year, Karen S. Lynch, CEO of CVS Health, said the company’s four million Medicare Advantage members “can have access to our Oak Street clinics.”

“We have an interested audience with benefit designs that can support the physicians (in the clinics),” Lynch said. “We can take patients to (Oak Street Health Centers).”

By having the pharmacy and the Oak Street centers “side by side,” CVS executives call the care delivery model an integrated “team-based approach” that allows seniors to pick up prescriptions at the same location and strengthen communication between physicians. pharmacists and other medical and behavioral health care providers.

“We are already seeing the benefits of our value-based model, which reduces the total cost of care for customers, clients and patients,” said Pykosz. “We believe our evidence-based approach will build on these results as we integrate more fully with our core businesses.”