FORTUNE OCTOBER/NOVEMBER 2021 61THE CEO WHO’S pledging
to reshape the way health
care is delivered in
America is unveiling her
biggest Big Idea yet.
On Feb. 1, Karen Lynch became
the chief at CVS Health, the fourth-
biggest company in the country—and
the largest in health care, America’s
biggest and in many ways most
backward industry. She started fast
with a daring gambit: putting CVS at
the heart of the pandemic response,
as a hub for COVID tests and vac-
cines. Tens of millions of people who
visited their nearby CVS saw for the
first time that they could also get a
cholesterol screening or full physical
inside those same four walls, without
waiting weeks to see a doctor in a
faraway office park.
Lynch’s second bold move is
the one she’s describing now. On
a late-summer Friday morning,
Lynch, fresh from her daily Peloton
workout, is on a Zoom call from her
home on Cape Cod, giving Fortune
an exclusive look at her new strategic
blueprint. It’s a plan to transform
CVS’s vast network of neighborhood
pharmacies into the new front door
for primary care.
At the heart of the strategy:
remaking hundreds of stores into
outlets 100% devoted to primary
care, capable of collectively serv-
ing tens of thousands of patients a
day—thus breaking through one of
the most stubborn bottlenecks in
medicine. “We’ll be far more than the
corner drugstore,” says Lynch. “We’re
pivoting to become more central to
America’s health care.”
Since CVS bought insurer Aetna
for $69 billion in 2018, it’s been
moving in this direction. The
company has already remodeled
roughly 1,000 of its 9,600 stores into
“HealthHUBs”—creating the na-
tion’s biggest network of urgent care
outlets. Those venues offer communi-
ties such vital preventive services as
glucose and retinopathy tests for dia-
betes and blood-pressure screenings
for hypertension, along with flu shots
and an array of health care products.
Still, the clinic-only strategy is a
major shift. A typical CVS covers
8,000 to 13,000 square feet, two
to three times the size of the aver-
age stand-alone urgent care clinic.
Not long ago, Fortune toured a vast
HealthHUB near Houston that fea-
tured four examination suites and a
pharmacy consultation room, offering
physicals and an array of testing. Yet
snacks, beauty products, and other
drugstore fare still covered half the
square footage. Eliminating retail
from such stores would free up far
more space for testing, counseling,
and wellness.
“Think of our footprint as a series
of concentric circles,” Lynch says
on our call. The “inner circle,” she
explains, will be what we’ll call the
super-clinics: They’ll offer “all the
things HealthHUBs do now on a
bigger scale, plus lots of new services
such as mental health counseling.”
HealthHUBs will be the second
circle. Traditional drugstores, which
sell greeting cards and toothpaste
adjacent to pharmacies and tiny
MinuteClinics, will be the third, outer
circle—they will remain a core pres-
ence but their numbers won’t grow.
As big a leap as it is, Lynch’s plan
represents a logical strategic move
for a company that combines one of
the nation’s largest retail footprints
with the resources and patient data
of a giant insurer. It could also
unlock the biggest pot of untapped
savings in health care, by helping
prevent chronic conditions from
getting worse and more costly. Fivelong-lasting illnesses—diabetes, hy-
pertension, cardiac disease, asthma,
and depression—account for 80%
of the nation’s annual $3.8 trillion
medical costs. Half of adult Ameri-
cans suffer from one or more of those
conditions. CVS’s super-clinics could
help more of them get preventive
care. That in turn could create a
flywheel effect across the company,
as care at the clinics lowered costs for
Aetna and new patients filled their
prescriptions at CVS. “What Lynch
is doing is a big deal,” says Charles
Rhyee, a Cowen analyst who covers
CVS. “It moves the ball in the direc-
tion of proactive care, not reactive as
the system is today.” (For more about
Lynch’s strategy, see our feature on
Fortune.com.)
The super-clinics’ biggest focus
will be seniors—especially Medi-
care Advantage (MA) members, the
fastest-growing group in patient
services and one of the most lucrative.
Lynch grew CVS Health’s MA busi-
ness exponentially during her seven
years at Aetna. Today, Aetna covers
2.9 million MA members, 11% of the
total. Lynch sees the first-circle clinics
as a way to boost MA enrollment, and
she says their eventual locations are
“really going to be based on demo-
graphics,” pinpointing areas with a
high mix of seniors in general—imply-
ing a strong tilt toward Sunbelt states.
In the first phase of the conversion,
CVS will launch “several hundred”
super-clinics, Lynch says; it will
maintain the number of HealthHUBs
at around 1,000. Just as important:
Lynch intends to use only its exist-
ing locations for these health centers,
enabling them to go live faster. CVS
stores blanket the country—85% of
Americans live within 10 miles of
one—and Lynch is racing to convert
them to their highest and best use.
“One thing the pandemic taught us
is how quickly we can move to serve
customer needs,” Lynch says. “I don’t
think we can ever go too fast.”
—Shawn TullyCOVID-19 vaccine
doses administered to
date by CVS Health34 million
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