CVS Health unveiled its new health-focused concept store that's designed to help the pharmacy chain become more of a health-care provider than a place to pick up prescriptions and greeting cards.
The three new pilot stores in Houston, Texas have been redesigned with much more space devoted to services to help customers manage chronic conditions like diabetes, hypertension and asthma.
Called HealthHUBs, they are part of the company's vision for its $70 billion acquisition of health insurer Aetna. In addition to the pharmacy, each store has an expanded health clinic, with a lab for blood testing and health screenings. There are also wellness rooms for yoga and seminars, dietitians and respiratory specialists in the HealthHUBs.
"We're pleased and surprised pleasantly with the ecosystem of health care that we've created here and how approachable it is, how much people are interested in it and there are certain things we can take to all stores," CVS Pharmacy President Kevin Hourican told CNBC.
In the new stores, less space is dedicated to greeting cards, seasonal items and general merchandise, Hourican said. Customers can still find toys, chocolate, ice cream and alcohol. But they contain more health-focused products, including durable medical equipment and supplies for asthma, diabetes care and sleep apnea.
As part of the acquisition, which closed in November, CVS promised to transform its stores and make customers healthier and health-care costs lower. As an insurer, CVS wants its patients to be healthier — and less expensive to insure. Its drugstores provide an ideal location, especially as its retail space becomes less profitable.
Consumers are shopping less in stores and more online. CVS and its rival Walgreens are trying to build their pharmacies into health-care destinations that can draw people in no matter what they're buying on the internet. E-commerce giant Amazon bought its way into prescription drug delivery last year when it bought PillPack, perhaps further pressuring drugstores.
CVS is trying to leverage its ability to provide hands-on help with a new "care concierge" in the store who helps guide customers through the new health services, and provide more care coordination between the pharmacy, the clinic and the other services.
People can check their blood pressure, weight and body mass index at a kiosk inside the store. They can also consult with a dietitian, who can connect them to Noom, an online weight-loss service.
In one instance, a person came into CVS and told the pharmacist they had just been diagnosed with pre-diabetes, or elevated blood sugar that's on the cusp of diabetes, said CVS Executive Vice President of Transformation Alan Lotvin. The pharmacist told the patient that pre-diabetes is reversible through diet and exercise, and then walked the person over to the dietitian for a consultation, he said.
The new services in the stores are available to all customers, not just Aetna members. One feature unique to some Aetna members is the type of care they receive at the pharmacy counter. Aetna identified about 100 patients that regularly come to the CVS store in Houston that will get a special consultation every time they pick up a prescription.
The conversations aren't about the specific medication patients are filling and are instead about the person's overall health, Hourican said. It's an opportunity to tell them about services CVS offers like delivery or MinuteClinic, a walk-in health clinic. Patients who are discharged from the hospital can also come into the stores and have the pharmacist review the medications they were taking beforehand, as well as the ones they were prescribed in the hospital.
CVS opened the three HealthHUBs in the Houston, Texas, area in December. The company will use those locations to test the new services. Hourican said CVS won't turn all of its stores into HealthHUBs but will likely take individual pieces and roll them out across more stores if they're successful.
Executives say early customer feedback has been positive. So far, more than 95 percent of the time when the care concierge engages with someone, the person wants to have a conversation, CVS said.
"It's one-stop shopping," said Jacqueline Haynes, who started coming to the new concept store after her favorite pharmacist was transferred to this branch last month.
Now, Haynes not only gets prescriptions here, but blood pressure screenings and nutritional coaching from the on-site dietitian who is teaching her how to eat to manage her blood pressure.
The company will conduct customer focus groups in coming weeks, to determine what's working and what isn't.
CVS won't turn all of its stores into HealthHUBs but will likely take individual pieces and roll them out across more stores if they're successful, Hourican said.
Analysts have asked CVS how much money redesigning its stores will cost. CVS has said between it and Aetna, the combined company already has a capital expenditure of about $2.6 billion annually it can use to remodel stores.
CVS reports fourth-quarter earnings next week.
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