Cvs Health Corporation · NYSE:CVS
Cvs Health — Investor Day (June 2019)
31 slides from Cvs Health's investor day presentation, Jun 4, 2019
Slide 1: Driving Profitable Growth as a Consumer Health Company
Driving Profitable Growth as a Consumer Health Company Karen S. Lynch Executive Vice President & President, Aetna
Slide 2: Cautionary statement regarding forward-looking statements
Cautionary statement regarding forward-looking statements The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of CVS Health Corporation. By their nature, all forward-looking statements involve risks and uncertainties. Actual
Slide 3: Health Care Benefits (HCB) executive team
Health Care Benefits (HCB) executive team Dave Edelman Marketing Scott Walker Sheryl Burke Chief Financial Officer Commercial Business Tanya Taupier Human Resources Jonathan Mayhew Erin Hoeflinger Markets and Distribution Business Strategy & Strategy & Enablement Excellence and Louis Ursini Consumer
Slide 4: Agenda
Agenda Strategy Business Update • Medicare • Medicaid • Commercial & Supplemental 4
Slide 5: Health is personal
From Traditional insurance company Health is personal To Together, we will accelerate our Consumer journey to transform the health Health care experience company 5
Slide 6: Transformational change
Complementing our core with the development of new products and services Grow the core Build the new Multi-pronged approach to Innovative solutions and deliver growth across services to be delivered Transformational HCB businesses in the community change Expand geographic Create integrated footprint
Slide 7: Integrating capabilities to differentiate the health care experience
Integrating capabilities to differentiate the health care experience CVS AETNA MinuteClinic® bswift® Walk-in Clinics Shop/buy/enroll Aetna® Community Care Retail Pharmacies Local care teams Consumer-centric PayFlex® approach to Pay. Save. Invest. Coram Medical cost management Specialty infusion Cust
Slide 8: The combined advantage
The combined advantage MinuteClinic In-store Medicare Be local optimization knowledge centers Make it Holistic product “Hospital to Home”* simple integration Improve Pharmacy panels Digital triage* health *Future program launch 8
Slide 9: The future
The future 1. Evolving from health insurer to consumer health company 2. Delivering holistic care to our members 3. Transforming the industry with combined CVS Health / Aetna assets 9
Slide 10: Agenda
Agenda Strategy Business Update • Medicare • Medicaid • Commercial & Supplemental 1 0
Slide 11: Our business today - Medicare
Our business today - Medicare Medicare Advantage Enrollment 1.3M+ Individual members WA MT ND ME VT 21% CAGR (2015 – 1Q 2019) MN NH OR NY MA ID WI SD MI CT RI WY PA NJ IA 900K+ Group NV NE IL IN OH WV DE UT members CA CO KS MO KY VA 15% CAGR (2015 – 1Q 2019) TN NC OK SC AZ AR NM AL GA MS LA TX 6.0M+
Slide 12: A compelling landscape
A compelling landscape We have grown membership faster than CMS expects a continuation of the positive trends competitors and captured share in Medicare Advantage enrollment 80 1Q 2019 18% AET MA CAGR1,3 2015 70 60 2.2M ENROLLMENT (M) 1.3M MA Members MA Members 50 Rank: #5 Rank: #3 CMS FORECAST4 40
Slide 13: Capturing the opportunity
Capturing the opportunity Medicare Advantage Star Percentage of Medicare More than 82,000 PDP to Ratings Advantage beneficiaries with Medicare Advantage % of members in 4+ star-rated plans access to Aetna plans1 conversions 2015 - 2019 87% 91% 88% 79% 75% 79% 70% 73% 2015 45% 67% 60% 2016 49% 2017 5
Slide 14: Critical capabilities
Critical capabilities Local Market Consumer Care Delivery Analytics & Presence & Depth Experience Ecosystem Technology Deep understanding Focus on simplification, Value-based contracting 360° view of consumers of market dynamics and minimizing consumer with aligned incentives; and providers; local p
Slide 15: The combined advantage
The combined advantage “Hospital to Home” Making it simpler for our customers to improve their quality of life Expect to launch pilot in 4Q 2019 15
Slide 16: The future
The future 1. Continued above industry growth 2. Commitment to STARS excellence 3. Personalized care in the community and in the home 16
Slide 17: Agenda
Agenda Strategy Business Update • Medicare • Medicaid • Commercial & Supplemental 17
Slide 18: Our business today - Medicaid
Our business today - Medicaid Our Medicaid Presence 2M members NY in risk and non-risk MI agreements PA NJ OH IL MD WV VA KS KY CA Serving 16 state AZ partners across the nation TX LA FL Footprint State 18
Slide 19: Medicaid growth opportunity
Medicaid growth opportunity Medicaid Expenditures FFS $903 B Managed Care 6.3% Projected CAGR1,6 $539 B $552 B $589 B 40% 60% $513 B of Medicaid expenditure $460 B 48% 47% is expected to be 49% 53% serviced by managed 58% 60% care by 20256 52% 53% 47% 51% 42% 2014 2015 2016 2017P 2018P 2025P 19
Slide 20: The opportunity to care for more complex and higher acuity populations
The opportunity to care for the more complex and higher acuity populations Physical Health We are delivering holistic health solutions for the Medicaid population that effectively respond to the social determinants of Starts Local health and solve for health inequalities Social Behavioral Economic H
Slide 21: Our approach to the marketplace
Our approach to the marketplace Be local Make it simple Improve health Lead the change Grow Medicaid Improve member and Drive higher quality and Deliver innovative through program provider experience plan performance solutions to evolve expansions, winning new to better serve our by improving qualit
Slide 22: The combined advantage
The combined advantage Expanded primary care services at MinuteClinic Improved access to care in the community Launching in 4Q 2019 22
Slide 23: The future
The future 1. Continuation of marketplace expansion 2. Capturing growth opportunities 3. Delivering improved access to care 23
Slide 24: Agenda
Agenda Strategy Business Update • Medicare • Medicaid • Commercial & Supplemental 24
Slide 25: Our business today - Commercial & Supplemental
Our business today - Commercial & Supplemental7 AK Commercial Medical Membership ~18M Commercial WA ME medical members MT ND MN VT NH projected for 20191 OR ID WI NY RI MA SD MI CT WY PA NJ IA NE OH MD DE NV IL IN UT WV CO VA Among the CA KS MO KY NC largest providers of AZ NM OK AR TN SC GA Dental
Slide 26: A mature landscape
A mature landscape Number of people enrolled in Percent of the U.S. population Expected commercial industry employer-sponsored enrolled in commercial revenue growth health care9 health care10 through 202211 Low single 156M 49% digit % Near-term Commercial medical membership and revenue expected to g
Slide 27: Critical capabilities
Critical capabilities Optimized value-based Service and clinical Growing supplemental care model models opportunities VBC related spend A1A membership Projected 2019 revenue1 >50% +600K ~$2.7B Digital enhancements 27
Slide 28: The combined advantage
The combined advantage Pharmacy panels Highly personalized pharmacist consultations Launched in 1Q 2019 28
Slide 29: The future
The future 1. Driving profitable growth 2. Delivering fully integrated offerings 3. Evolving with industry change 29
Slide 30: A redefined health care experience is within reach
K E Y TA K E AW AY S A redefined health care experience is within reach Ongoing progress on the journey to transform health care Uniquely positioned to drive growth in all lines of business Continued commitment to strategy, accelerated through the CVS Health combination 30
Slide 31: Endnotes
Endnotes 1. Currently enacted laws and regulations were used in all the Company’s projections. 2. February 2019 CMS Enrollment File; Kaiser Family Foundation 3. CVS Finance 4. CMS NHE Data, available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and- Reports/NationalH