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CVS Health’s Larry Merlo addresses National Press Club on leadership in healthcare innovation

BY Antoinette Alexander

WASHINGTON — With the recent unveiling of a new corporate name and a network of retail pharmacies that are now officially tobacco-free, CVS Health continues to forge ahead on its mission to help shape the future of health care. To further communicate its purpose to both consumers and press and to discuss how the company’s unique, integrated model is making a difference in healthcare, Larry Merlo, president and CEO of CVS Health, spoke on Friday before the National Press Club in Washington, D.C.

“At CVS Health, [our purpose] is simply to work hard to help people on their path to better health and all across the organization it serves as our guidepost as we think about business decisions and focus on healthcare innovation,” Merlo said during the luncheon, which was also a webcast.

Merlo began his remarks with a brief look at the changes impacting the currently stressed healthcare environment and the factors driving healthcare spending, such as the growing prevalence of chronic disease and medication non-adherence.

“Does it surprise you to know that more than half of all Americans today suffer from one or more chronic diseases? And this is expected to continue to rise for the next 20 years. Chronic disease today accounts for nearly 3-out-of-every-4 dollars being spent on health care. At the same time, the number of people who don’t take prescriptions as described we are calling it an ‘epidemic,’” Merlo said.

Now throw into the mix healthcare reform and a shift toward outcomes-based payment models, the retailization of health care as consumers take a more active role in their healthcare decisions, and a greater transition to a more digital society. The bottom line: Health care is evolving.

“I’m convinced that one very important avenue to improve quality, cost and access is rooted in pharmacy care, and it’s reflected in many of the things that we are doing at CVS Health to drive solutions,” Merlo told attendees. “… Pharmacy is extending the frontlines of health care to deliver better outcomes more affordably to the people that we serve, and CVS Health is driving many innovative approaches to reinventing pharmacy.”

To illustrate some of the ways in which CVS Health is reinventing pharmacy, Merlo highlighted the company’s Pharmacy Advisor program and Specialty Connect programs. Merlo also discussed the importance of MinuteClinic and its ability to improve access to care as the nation faces a growing physician shortage and an influx of newly insured Americans under health reform.

“Today, MinuteClinic provides convenient, affordable, high quality care for both acute needs as well as chronic and wellness needs whether it is vaccinations, screenings, weight-loss programs, chronic disease monitoring,” said Merlo, who noted that it plans to operate 1,500 clinics by 2017.

Merlo, however, stressed that MinuteClinic locations are designed to be complementary and collaborative with primary care medical homes — not replace the care provided by primary care physicians.

When asked about the role of telemedicine within MinuteClinics, Merlo said, “We are experimenting with telemedicine. We actually have 28 sites in Southern California and Texas. … The patient feedback is off the chart positive.”

Before wrapping up his presentation, Merlo discussed the company’s decision to stop selling cigarettes.

“As a unified management team, along with our board of directors, we made the decision to quit tobacco for good. We announced that decision back in February and six months later we are officially tobacco free one month ahead of schedule, and we are proud to say that we are the first national pharmacy chain in the country to take this action to support the well-being of our patients and our customers,” said Merlo, as attendees showed their support through a round of applause.

Added Merlo, “To sum it up, we don’t see exiting the sale of tobacco as an important decision for just us. We see it as an important decision for public health.”

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Retailers express cautious optimism regarding holiday sales

BY Marianne Wilson

PHILADELPHIA — Nearly one-quarter (24%) of retailers expect a significant increase (5% or more) in year-over-year sales during the 2014 holiday season, while another 70% are predicting sales will be on par with the 2013 season, according to a survey by global management consultancy Hay Group.
 
The cautious optimism around sales is reflected in companies’ seasonal hiring plans. While most retailers (70%) plan to hire staff at 2013 levels, the emphasis has shifted from seasonal to permanent workers, with 24% of companies planning to hire more permanent staff in 2014, compared to just 13% last season.
 
Additionally, 59% of retailers said their omnichannel strategy has impacted the training they provide to their sales staff.
 
"Consumers now expect a seamless shopping experience across channels,” said Maryam Morse, national practice leader for Hay Group’s retail practice. “To respond to this demand, retailers must have well-trained and nimble in-store employees who can serve as true brand ambassadors, leading customers to the point-of-sale, regardless of where the product resides."
 
Many companies are shifting their holiday promotions earlier in the year. Fifty-three percent of retailers will begin promotions in either September or October this year.
 
Nearly half (47%) of retailers surveyed in 2014 have a clearly articulated omnichannel strategy, compared to only 14% in 2013. The majority of retailers (71%) will be relying, at least in part, on their mobile platform to help drive holiday sales.
 
“Retailers are stepping up to the omnichannel challenge this year in an effort to drive sales from what’s proving to be a very disciplined consumer,” said Craig Rowley, VP and global practice leader for Hay Group’s retail practice. “Even so, the 2014 holiday season is likely to be a testing ground for many large retailers as they try to get a better grasp on what today’s consumer is going to buy, where they’re going to buy it and how they want to receive it. Retailers who come out on top will be those with the flexibility to quickly adapt to customers’ needs across a variety of channels.”
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Albertsons, Safeway unveil new senior leadership team upon merger

BY Antoinette Alexander

BOISE, Idaho and PLEASANTON, Calif. — AB Acquisition LLC (Albertsons) and Safeway announced on Friday the new senior leadership team and division leaders for the combined company that will take effect upon the closing of the proposed merger transaction, which is pending customary regulatory approvals.

"We're drawing on the strong talent within both companies to build an innovative, customer-focused and growth-driven company," said Safeway president and CEO, Robert Edwards, who will serve as the combined company's president and CEO. "We are confident in this team's ability to build a great company that's positioned to win over the long term by earning the loyalty of grocery shoppers in every market we serve and delivering superior operational and financial results."

Safeway shareholders approved the proposed merger agreement on July 25, under which AB Acquisition LLC, an affiliate of Albertsons, will acquire all outstanding shares of Safeway. The transaction is under review by the Federal Trade Commission and is expected to close in the fourth quarter of this year, pending FTC approval.

After regulatory approval and closing of the transaction, the new company will have the following leadership team:

  • Bob Gordon, EVP and general counsel
  • Shane Sampson, EVP, marketing and merchandising
  • Andy Scoggin, EVP, human resources, labor relations, public affairs and government affairs
  • Jerry Tidwell, EVP, supply chain and manufacturing
  • Lee Wilson, EVP and chief administrative officer
  • Bob Dimond, EVP and CFO, reporting to Wilson
  • Justin Ewing, EVP, corporate development and real estate, reporting to Wilson
  • Barry Libenson, interim EVP and CIO, reporting to Wilson. Libenson is expected to be with the new company through March 2015, at which time a successor will be named.
  • Wayne Denningham, EVP and COO, South Region
  • Justin Dye, EVP and COO, East Region
  • Kelly Griffith, EVP and COO, North Region

The new company will be comprised of three regions and 14 retail divisions. The company stated that it will keep the focus and financial responsibility at the division level, but take full advantage of the expertise, vision and core capabilities of the corporate team. The 14 divisions will be supported by corporate offices in Boise, Idaho; Pleasanton, Calif., and Phoenix, Ariz.  Furthermore, no banner changes are planned. 

The division presidents for the new company, who will report to the COO for their respective regions, will be:

  • Dennis Bassler, Portland division, North Region
  • Paul McTavish, Denver division, North Region
  • Susan Morris, Intermountain division, North Region
  • Tom Schwilke, Northern California division, North Region
  • Dan Valenzuela, Seattle division, North Region
  • Shane Dorcheus, Southwest division, South Region
  • Scott Hayes, Southern division, South Region
  • Sidney Hopper, Houston division, South Region
  • Lori Raya, Southern California division, South Region
  • Robert Taylor, United division, South Region
  • Steve Burnham, Eastern division, East Region
  • Jim Perkins, Acme division, East Region
  • Jim Rice, Shaw's division, East Region
  • Mike Withers, Jewel-Osco division, East Region

"We know the best way to grow our business is to have the highest quality fresh departments, lower prices, clean, well-stocked stores and the best customer service in the market," said Bob Miller, Albertsons current CEO, who will become executive chairman of the combined company upon completion of the transaction. "Our teams will focus on delivering what customers want locally, and we will give our store teams more flexibility to make decisions that are right for their neighborhoods. The division teams will have the responsibility to have the right assortment for their markets."

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