CVS Health recently showcased a new concept store, the HealthHUB, that transforms the pharmacy into a health center. According to CVS Health, the HealthHUB pilot locations in Houston “offer a broader range of health care services, new product categories, digital tools and on-demand health kiosks, trusted advice and personalized care.” In addition, “The new store format also includes a variety of pathways to nutritional health with one-on-one and group counseling delivered by an in-store licensed dietitian, as well as access to a free weight loss digital app.”

To encourage wellness care, CVS Health makes available kiosks where people can check their blood pressure, weight, and body mass index. And CVS Health is providing care concierges to guide customers through different services. CNBC relates the story of a customer who hold a CVS Health pharmacist that they had been diagnosed with prediabetes. The pharmacist indicated to the customer that prediabetes is reversible with proper diet and exercise and then referred the customer to an in-store dietician for consultation.

A Broader Transformation

The HealthHUB is one way CVS Health is fulfilling its broader transformation from pharmacy retailer to a healthcare company – a change that was accelerated when CVS Health bought Aetna. The HealthHUB also demonstrates a major competitive advantage that CVS Health has over Amazon, whose foray into the pharmaceutical and healthcare is well documented. For instance, in 2018, Amazon bought online drugstore PillPak, which provides 24/7 prescription services. Since the acquisition, PillPak has expanded into more territories on its way to an apparent national rollout. In addition, as Amazon expands its Echo smart speakers into more homes (where Amazon commands a sizable market share), it should become easier for Amazon customers to ordering and reordering pharmaceuticals.

But Amazon lacks a brick-and-mortar network and deep experience in healthcare and pharmaceuticals. The company’s competitive advantage is rapid product fulfillment. CVS Health, Walgreens, and Walmart all have the ability to leverage their physical spaces to provide value-added services. At Walmart, for example, customers can get vision care at 3,000 in-store vision centers and health screenings at Walmart’s 4,700 locations. Through an agreement with insurer Anthem, Walmart makes its stores centers for Medicare enrollees to buy over-the-counter medications and health supplies. (Walmart also participates in CVS Caremark Commercial and Managed Medicaid Retail Pharmacy Networks.)

The HealthHUBs capitalize on another aspect of location: community building. As CVS Health announced, “The design of the HealthHUB® also includes community spaces and digitally enabled offerings. Wellness Rooms are available for CVS Health professionals and community partners to host group events, including health classes, nutritional seminars and benefits education.”

These services become even more important as healthcare continues a shift toward wellness care. Encouraging people to take better care of themselves reduces healthcare expenses all around, including, of course, insurance costs. It’s worth noting that Aetna was an early proponent of using Apple Watches as a fitness monitor. In 2017, Aetna announced it would provide Apple Watches to customers to help them track their fitness. And now Aetna has launched a new wellness program, Attain, that offers participants rewards in exchange for healthy behavior. The program is powered by the Apple Watch, which participants use to capture personal wellness data.

Questions for CVS Health

The HealthHUB opens up a number of exciting questions. For instance:

  • Given CVS Health’s ownership of Aetna, how might CVS Health integrate the Apple Watch into its re-imagined stores? CVS Health already offers an app for pharmacy services. The possibilities exist to provide even more wellness services centered on the Apple Watch.
  • How might CVS Health anticipate and respond to the possibility that Amazon could offer health services through a brick-and-mortar network? Whole Foods gives Amazon nearly 500 outlets, which is small compared to CVS Health, Walgreens, and Walmart. In addition, Amazon Go, Amazon’s network of cashierless stores, may expand to 3,000 locations by 2021. Amazon Go, which makes retail frictionless, could also make wellness services frictionless. And both Amazon Go and Whole Foods have entrée to Amazon’s expanding base of Amazon Prime members.
  • Given the rise of voice-based services, how might CVS Health integrate voice into the customer’s journey through its stores?
  • How might CVS Health create new location-based services that build community goodwill and connect its customers to other related services, such as fitness gyms and coaches? (CVS Health could potentially operate local health services marketplaces.)

Healthcare companies such as CVS Health have plenty of tools at their disposal, including design sprints, to test new services in a way that mitigates cost and risk. With design sprints, organizations identify a problem they and their customers are trying to solve, come up with a rough solution, test the idea against feedback from real customers, and create a prototype of the minimum lovable product (the initial version of the product that can be created to generate the most customer love using the least amount of time and costing as little as possible). At Moonshot, we use design sprints as part of a larger process known as FUEL, in which we go beyond concepting and actually help companies launch products. (Here’s an example of how we’ve used design sprints.)

These are exciting times for businesses seeking to transform themselves. CVS Health is one such business. The company told CNBC that the HealthHUBS are getting positive customer feedback. For instance, nearly every patient engages with care concierges when the service is offered. More than 95 percent of the time when the care concierge engages with someone, the person wants to have a conversation, CVS Health said. Good things happen when you have the courage to change your own business.

Mike Edmonds

Mike Edmonds

Managing Director, VP Product