CVS’s Bold Plan for Healthcare

It has always been said that the best inventions come from the private sector. As Adam Smith put it, the division of labor matched with the fact that a person will want to do the least amount of work and make the most money will encourage innovative efficiencies. Now the CEO of CVS has his own innovative idea. This from Business Week:

“What does (CEO Tom) Ryan intend to do with his drugstore empire? His goal, he says, is to help transform America’s expensive and often ineffective health-care system. Seeking to take advantage of President Barack Obama’s commitment to health-care reform, Ryan wants to use CVS’s vast prescription database and burgeoning network of in-store clinics to treat patients with chronic diseases and help keep them out of the hospital, where most medical costs are incurred. “I don’t think our health-care system is broken,” Ryan says. “We are just spending too much, and it’s unproductive.”

Ryan believes CVS could help solve this problem and, in the process, boost its own bottom line. As a pharmacy benefit management company, the Caremark unit handles drug coverage for large employers and health plans, negotiating discounts with drugmakers. It owns a treasure trove of prescription drug data, as does CVS. The merged company is thus an info tech Goliath, filling or managing more than a billion prescriptions a year. It can use that information to figure out which customers require a gentle reminder to come in for a refill. As a result, customers would buy more drugs, make ancillary purchases in the store, and maybe even visit the clinic. Ryan’s challenge is convincing CVS customers that such refill reminders aren’t just marketing tactics. He is encouraged that the Obama Administration recognizes the importance of drug compliance and will support private sector initiatives. As debates over health-care reform heat up this spring, Ryan will argue that his aggressive strategies also make good medical and economic sense.”

Tom Ryan is the CEO of CVS. This would be a great idea that instead of having people running to hospitals they could come to these in-store clinics to get cheap reliable advice. This goes along with one of my own personal ideas of creating a fast lane at the ER. You would sign over the fact that this person is a nurse or a physicians assistant and that they will not give you a thousand tests you do not need. The CVS platform to me is similar in the fact that it will keep some people out of the ERs and doctors offices that do not need to. The insurance companies should sign on to this also as it will save them lots of money.

The rest is here.


Published in: on February 16, 2009 at 1:29 pm  Comments (1)  
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One CommentLeave a comment

  1. Hi this blog is great I will be recommending it to friends.

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