CVS Health Corporation’s second-quarter results reported growth for earnings and revenue expectations, however, its latest focus on healthcare services means continued cost-cutting measures and layoffs.
For the three months ending June 30 total revenues for CVS increased 10.3% year-over-year driven by growth across all segments.
“Our diversified business model delivered strong results this quarter. We continue to execute on our strategy to expand access to health services across our care delivery channels and strengthen our engagement with consumers to improve their health and well-being,” said Karen Lynch, CVS Health president and CEO.
Other key highlights from the earnings report included:
- Completion of the Oak Street Health acquisition, a multi-payor, value-based primary care company with approximately 600 primary care providers and more than 170 medical centers across 21 states
- Launch of Caremark Cost Saver to help lower pharmacy out-of-pocket drug costs for CVS Caremark clients’ members
- Health services segment generated $46.22 billion in revenue, a 7.6% increase compared with the same quarter in 2022
- CVS’ retail pharmacy division generated $28.78 billion in sales, also 7.6% higher than the year-ago period, driven by increased prescription volume
- The company’s health insurance segment generated $26.75 billion, a 17.6% increase over the second quarter of 2022
While earnings and revenues beat expectations, CVS has simultaneously implemented a cost-cutting program as it pushes deeper into healthcare services in the wake of its $8 billion acquisition of Signify Health and its $10.6 billion purchase of Oak Street Health, reports CNBC.
Another part of this effort means cutting 5,000 jobs. Employees were notified via an internal memo earlier this week, where Lynch said the decisions were extremely difficult but necessary as CVS evolves to adapt to new consumer health needs and expectations.
The company has also set a goal of realizing $700 million-$800 million in cost savings in 2024, which will be reallocated and invested in health services and technology, Lynch said.
