Cvs Health Corporation · NYSE:CVS
Cvs Health — Investor Day (December 2023)
108 slides from Cvs Health's investor day presentation, Dec 5, 2023
Slide 1: Investor Day 2023
“© SHealth. Investor Day 2023
Slide 2: Cautionary statement concerning forward-looking statements
Cautionary statement concerning forward-looking statements This presentation includes 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 (“CVS Health”). Certain stateme
Slide 3: Today's agenda
Welcome and introductions Larry McGrath Building a world of health Karen S. Lynch Today’s Driving accelerated performance Thomas F. Cowhey agenda Growth and differentiation Business Presidents CVS Health Executive Q & A management team ©2023 CVS Health and/or one of its affiliates. Confidential and
Slide 4: Building a world of health
“© SHealth. Building a world of health
Slide 5: Building a world of health around every consumer
OUR VISION Building a world of health around every consumer ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 5
Slide 6: Powered by a committed team
Powered by a committed team with deep industry expertise and a passion for improving health care Karen S. Lynch President and CEO Kyle Armbrester Sreekanth K. Chaguturu Thomas F. Cowhey Katerina Guerraz Laurie P. Havanec J. David Joyner EVP and Chief Executive Officer, EVP and Interim EVP and Chief
Slide 7: Delivering on our commitments
Delivering on our commitments What we Advance all-payor Optimize retail Diversify growth portfolio with new Enhance omni- channel health Return capital primary care stated we delivery capabilities portfolio health services experiences to shareholders would do ü ü ü ü ü What we ü Acquired Oak Street
Slide 8: CVS Health, a trusted brand in health care
CVS Health, a trusted brand in health care $355B 120M+ Annual revenue1 Consumers we serve $17.4B 2.3B+ Adjusted operating income1 Pharmacy claims processed1,2 $13B+ 10M+ Operating cash flow3 Annual health services visits 300K+ 85% Purpose driven colleagues Of U.S. population lives within 10 miles of
Slide 9: Superior assets. Superior care. Superior value.
Superior assets. Superior care. Superior value. ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 9
Slide 10: Fully engaged member
Picks up diabetes Fully maintenance meds; learns about in-home evaluation Aetna member enrolls in CVS from pharmacist Health App for convenient engaged Receives in-home evaluation access to benefits, that identifies complications primary care, pharmacy and from arthritis; hears about high retail hea
Slide 11: Our businesses deliver strong value
Our businesses deliver strong value Health Care Health Pharmacy & Benefits Services Consumer Wellness $104.2B $182.7B $115.9B Annual revenue1 Annual revenue1 Annual revenue1 $5.70B $7.25B $5.81B Adjusted operating income1 Adjusted operating income1 Adjusted operating income1 35M+ 90M+ 120M Unique me
Slide 12: Advancing the future of health care
Advancing the future of health care Driving deeper Bringing excellence Innovating Increasing engagement and in hyper-local and evolving transparency in harnessing innovative convenience our PBM model retail pharmacy technologies ©2023 CVS Health and/or one of its affiliates. Confidential and proprie
Slide 13: Setting the standard for digital
Engaging consumers in unique and connected experiences Setting the standard for digital 55+ million digital customers engagement and utility New CVS Health app will provide an integrated and personalized experience ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 13
Slide 14: Realizing significant value with responsible AI
Realizing significant value with responsible AI Increase efficiency of Personalize member operations experience and engagement Automate workflows and Improve patient and improve safety provider experience While preserving the human connection in health care ©2023 CVS Health and/or one of its affilia
Slide 15: Excellence in hyper-local convenience
Excellence in hyper-local convenience Over 90 million 1,000 retail 200+ clinics in Over 11,000 licensed pharmacy customers health clinics 25 states clinicians delivering 2.7 million annual in-home evaluations ~5 million daily Over 6 million in- 51% reduction in interactions across person health visi
Slide 16: A history of innovating our PBM model
Of rebates passed 98%+ through to clients A history of innovating our Of Pharmacy Services profit PBM model ~19% driven by retained rebates and network spread to meet customer needs Of claims had fully transparent 75%+ pass-through pricing1 1. As of June 2023 ©2023 CVS Health and/or one of its affil
Slide 17: Increasing transparency in retail pharmacy
Increasing transparency in retail pharmacy Evolving our reimbursement model Transparently pass through Remove cross-subsidization cost improvements Reasonably compensate us Align to underlying costs for value created of the business ©2023 CVS Health and/or one of its affiliates. Confidential and pro
Slide 18: Bringing CVS Health's powerful assets together to create more value
Bringing CVS Health’s powerful assets together to create more value ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 18
Slide 19: Enterprise Key Measures of Success
Enterprise Key Measures of Success Number of Number of Number of consumers % increase in CVS Health consumers unique digital accessing 2 or more consumer we serve customers CVS Health offerings lifetime value RESULTING IN Enrollment Margin Accelerating More members in Performance growth improvement
Slide 20: Long-term financial guidance
Long-term financial guidance • Adjusted EPS growth floor of 6% • Growth increasing over time • Opportunities to outperform, Segment Disciplined Clear opportunities including Medicare commitments investments and to outperform Advantage margin anchored to capital deployment improvement, are projected
Slide 21: Why CVS Health
Strong, sustainable growth, including accelerating growth from Health Care Delivery Powerful cash flow generation Why Balanced capital deployment with growing dividend CVS Health Commitment to sustainable business practices and employee development Accelerating our Adjusted EPS growth over time ©202
Slide 22: Driving Accelerated Performance
Driving Accelerated Performance
Slide 23: Closing out 2023
Closing out 2023 ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 23
Slide 24: On track to deliver another strong year while navigating a challenging environment
On track to deliver another strong year while navigating a challenging environment a testament to the power of our enterprise $8.70 - $8.90 q($0.35) p+$0.15 2023 ADJUSTED Net impact of Signify TAILWINDS EPS GUIDANCE and Oak Street p Pharmacy services outperformance $8.50 - $8.70 as of Q4 2022 acquis
Slide 25: Guidance
Full year In billions, except per share amounts 2023 guidance Total revenues $351.5 to $357.3 2023 Adjusted operating income $17.21 to $17.57 Guidance as of December 5, 2023 Adjusted earnings per share $8.50 to $8.70 Upper-end of Cash flow from operations $12.5 to $13.5 Note: For segment specific de
Slide 26: 2024 outlook and trends
2024 outlook and trends ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 26
Slide 27: Health Care Benefits
2024 OUTLOOK At least $119.8B +15% ~87.2% Health Care Revenue YOY Revenue Growth1 MBR Benefits At least ~26.2M $5.77B +1% Adj. Operating YOY AOI Growth1 Medical Income (AOI) members 2024 TAILWINDS & HEADWINDS p Cost savings q Medicare Stars rating p Medicare Advantage membership growth q Medicare ut
Slide 28: Pharmacy & Consumer Wellness
2024 OUTLOOK At least $123.4B +6% Pharmacy & Revenue YOY Revenue ~1.69B Consumer At least Growth1 Prescriptions Wellness $5.51B (5%) Filled2 Adj. Operating YOY AOI Decline1 Income (AOI) 2024 TAILWINDS & HEADWINDS p Pharmacy cost of goods improvements q Pharmacy reimbursement pressure p Script growth
Slide 29: Health Services
2024 OUTLOOK At least $169.7B (7%) Health Revenue YOY Revenue Growth1 ~1.87B Services Pharmacy At least Claims $7.49B +3% Processed2 Adj. Operating YOY AOI Growth1 Income (AOI) 2024 TAILWINDS & HEADWINDS p Script volume growth & inflation q Client price improvements p Purchasing economics q Centene
Slide 30: Guidance
Full year In billions, except per share amounts 2024 guidance Total revenues At least $366B 2024 Adjusted operating income At least $17.24B Guidance Adjusted earnings per share At least $8.50 Cash flow from operations At least $12.5B Note: For segment specific detail, please reference the CVS Health
Slide 31: Long-term guidance framework
Long-term guidance framework ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 31
Slide 32: Long-term guidance framework
Long-term guidance framework will ensure we deliver on our commitments with opportunities to outperform Long-term growth Opportunities for potential guidance outperformance ü Market-based segment q Driving growth above market-based rates growth expectations q Upside from investments ü Flexibility fo
Slide 33: Establishing our Adjusted EPS growth baseline
Establishing our Adjusted EPS growth baseline Adjusted operating drives a floor expectation income growth from of at least our segments will contribute = 6% growth at least 4% to increasing our Adjusted EPS growth Capital over time deployment with opportunities for at least near-term outperformance
Slide 34: Establishing our Adjusted EPS growth baseline
Establishing our Adjusted EPS growth baseline Adjusted operating 7% growth income growth from Health Care Benefits our segments will contribute (5%) decline at least 4% to Pharmacy & Consumer Wellness our Adjusted EPS growth 7%+ growth Health Services ©2023 CVS Health and/or one of its affiliates. C
Slide 35: Establishing our Adjusted EPS growth baseline
Establishing our Adjusted EPS growth baseline (5%) Pharmacy & Consumer Wellness Adjusted operating 7% growth income growth from Health Care Benefits our segments will • Medicare Advantage growth contribute • Individual Exchange growth at least 4% to • Targeted Medicaid growth our Adjusted • Commerci
Slide 36: Establishing our Adjusted EPS growth baseline
Establishing our Adjusted EPS growth baseline 7%+ Health Services Adjusted operating (5%) decline income growth from Pharmacy & Consumer Wellness our segments will • Reimbursement pressure contribute • Script and front store growth at least 4% to • Improved drug purchasing our Adjusted • Value-add s
Slide 37: Establishing our Adjusted EPS growth baseline
Establishing our Adjusted EPS growth baseline 7% Health Care Benefits Adjusted operating 7%+ growth income growth from Health Services our segments will Pharmacy Services Health Care Delivery contribute • Claims growth • Clinic expansion at least 4% to • Value from • Patient growth services our Adju
Slide 38: Accelerating baseline growth
Accelerating 6.0%+ 7.5%+ +1.5% contribution to baseline growth 2.0% 2.0% Adjusted EPS through shifting contributions from each of our segments over time 7.5%+ Higher contribution from 6.5%+ growth businesses Contribution from growth businesses HCB | HSS Contribution from declining businesses (2.5%)
Slide 39: Opportunities for outperformance
Opportunities for outperformance drive towards or above the upper-end of market growth rates + Medicare Advantage margin improvement starting in 2025 + New retail pharmacy pricing model + Increased patient enrollment, product offerings and growth of Health Care Delivery + Benefits from future invest
Slide 40: Powerful cash flow generation
Powerful cash flow generation ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 40
Slide 41: Powerful cash flow generation
Powerful cash flow generation drives value creation and enables our strategy CUMULATIVE 2024 TO 2026 ~35% | Invest in our business • Capital expenditures $35 to $40 billion Cash flows from operations • Risk-based capital ~25% | Compelling dividend $5 to $10 billion Incremental debt capacity • Target
Slide 42: Robust, diverse sources of free cash flow
Robust, diverse sources of free cash flow from all business segments Health EXPECTED Services Corporate1 ANNUAL AVERAGE (2024 to 2026) $12.5+ billion Pharmacy & Cash flows from Consumer operations Wellness $5.5 billion Capital expenditures Health Care Benefits and risk-based capital $7B+ Total Free
Slide 43: Value creation across the enterprise
Value creation across the enterprise ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 43
Slide 44: Serving more than a quarter of the U.S. population
Serving more than a quarter of the U.S. population provides a unique opportunity to expand engagement Our national footprint and 120M CUSTOMERS 1 local community presence engage millions of consumers in high-quality care and help 90M MEMBERS 2 accelerate growth 35M MEMBERS 3 Health Care 1. Reflects
Slide 45: What is the lifetime value of a customer?
What is the lifetime value of a customer? ELTV Incremental Average ENTERPRISE LIFETIME Member Duration VALUE Value In Years Net Present Value ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 45
Slide 46: Looking at the unit economics of our portfolio
Looking at the unit economics of our portfolio opportunity to materially expand lifetime value through our CVS Health Care Delivery assets is clear CVS ACO Health Care Delivery Health Care Delivery generates significantly higher lifetime value ©2023 CVS Health and/or one of its affiliates. Confident
Slide 47: Unlocking the power of CVS Health
Unlocking the power of CVS Health Greater medical Better health cost savings outcomes when a member uses more than one service Increased medication Improved member experience, adherence driving higher retention Creating integrated value that is up to 10% greater than the sum of our parts ©2023 CVS H
Slide 48: Opportunity of increasing penetration
Opportunity of increasing penetration Over 70% of Aetna members are integrated with Caremark New Opportunity Health Care Strong Value Highest value per Delivery Capture incremental with room to grow consumer engaged Caremark members use CVS Pharmacy about 1/3 of the time Small gains in penetration c
Slide 49: Enterprise Key Measures of Success
Enterprise Key Measures of Success Number of Number of Number of consumers % increase in CVS Health consumers unique digital accessing 2 or more consumer we serve customers CVS Health offerings lifetime value R E S U LT I N G I N Enrollment Margin Accelerating More members in Performance growth impr
Slide 50: Why CVS Health, why now?
Why CVS Health, why now? our powerful strategy and unique combination of assets position us to build a world of health around the consumer Reliable, Powerful cash generation Attractive return diversified and that supports strategic profile, anchored accelerating goals and opportunistic on a compelli
Slide 51: Health Care Benefits
“© SHealth. Health Care Benefits
Slide 52: The health care market continues to be dynamic
The health care market continues to be dynamic Aging Demographic and Shift towards full-risk population funding shifts value-based care Well-positioned to deliver a differentiated health care experience and drive growth across all product lines Leading Medicare Flexible and diverse Increasing full-r
Slide 53: Aetna has a proven history of delivering growth
Aetna has a proven history of delivering growth supported by a diversified portfolio of products uniquely tailored for varying customer needs Our results Our customers Our value 10% 50%+ 87% Medicare Advantage Fortune 100 Medicare Advantage 4-year membership companies served2 membership in 4+ Star g
Slide 54: CVS Health has accelerated our momentum
THE COMBINATION WITH CVS Health has REVENUE BY PRODUCT 2 ($ billions) $104B accelerated our 11% Total momentum CAGR 14% Government $27 CAGR Since 2019, we have… $70B $6 Grown core businesses1 $18 $28 Significantly grown Government businesses 70% $8 Government programs Re-entered the Individual Excha
Slide 55: Well-positioned for core growth
Well-positioned for core growth Individual Targeted Exchange Medicaid expansion growth Leading Compelling Medicare Commercial STRENGTHENED BY business CVS HEALTH INTEGRATED ASSETS offering ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 55
Slide 56: Medicare
Individual MA Group MA Medicare $18B $23B $53B 2023E A broad product portfolio REVENUE representing more than 50% $5B $7B of Aetna’s revenue and Individual serving ~11M members1 Dual-Eligible Special Needs PDP & Supplemental Benefits 1. Reflect 2023E; includes Medicare Advantage, PDP and Supplementa
Slide 57: A strong Medicare Advantage business
A strong Medicare Advantage business KEYS TO SUCCESS Sustain best-in-class Star Ratings WE WILL Drive Increasing focus on special needs populations profitable Strengthen value-based care capabilities growth Deliver product innovation powered by CVS Health integrated assets, digital tools and technol
Slide 58: Path to Medicare Advantage margin recapture
Path to Medicare Advantage margin recapture Continued Growth & Margin Improvement Recovery Despite Pressured Medicare Stars Headwind Results 2025 2024 2023 p Expect enrollment growth at or above market p Expect enrollment p Regained 4+ Star rating for growth above market p Stars revenue recovery 202
Slide 59: Individual Exchange
In 2024, we will have presence in 17 states reaching more than half of the national addressable market… WA ME MT ND Individual MN NH OR VT ID WI NY SD MA Exchange WY MI CT RI IA PA NJ NE NV OH UT DE CA IL IN D.C. CO WV VA MD KS MO KY We continue to NC TN AZ OK expand our NM AR SC AL GA MS Individual
Slide 60: Individual Exchange expansion
Individual Exchange expansion powered by CVS Health integrated assets KEYS TO SUCCESS Differentiated and integrated product offerings WE WILL Drive Innovative distribution and marketing disciplined Consumer-centric clinical programs growth Unique and accessible networks focused on value-based care G
Slide 61: Compelling Commercial offering
Compelling Commercial offering driven by product innovation to meet customer needs KEYS TO SUCCESS Grow share in priority geographies WE WILL Balance Differentiate through innovative, integrated product offerings margin and membership Achieve best-in-class network discounts growth Drive engagement a
Slide 62: We will target Medicaid growth in geographies
We will target Medicaid growth in geographies where we can bring the full portfolio of CVS Health assets to bear KEYS TO SUCCESS Execute coordinated, Duals-focused market entry strategy WE WILL Retain key Deliver data-driven quality and population health excellence contracts and Deepen provider rela
Slide 63: We remain committed to Enterprise growth
HEALTH CARE BENEFITS We remain committed to Enterprise growth 87% of Medicare The value Advantage 2M+ members with ~800K members access to OTCHS accessing Signify in- of our membership in 4+ benefits2 home services3 Star rated plans1 integrated model 17M+ integrated ~41% penetration of Will double A
Slide 64: Health Care Benefits Key Measures of Success
Health Care Benefits Key Measures of Success At or above market Deliver on % of MA members in % penetration in enrollment target margins 4+ Star rated CVS Caremark, growth by line of business plans Retail and Health Care Delivery ©2023 CVS Health and/or one of its affiliates. Confidential and propri
Slide 65: We are committed to delivering strong results
HEALTH CARE BENEFITS We are committed to delivering strong results Key takeaways The path forward • Leading business with diverse product offering Leading Medicare Advantage Star ratings • Attractive growth opportunities in all products • Clear and deliberate path to improve margins in Increasing va
Slide 66: Pharmacy & Consumer Wellness
Pharmacy & Consumer Wellness
Slide 67: Retail Pharmacy - critical to the health care system
Retail Pharmacy - critical to the health care system Health care Pharmacy is Role of pharmacy is local trusted is expanding ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 67
Slide 68: CVS is the leading national pharmacy chain
CVS is the leading national pharmacy chain Our results Our customers Value delivered 26.6% ~14M #1 Weekly pharmacy National retail chain in Pharmacy share1 interactions3 adherence performance4 1.6B+ 73M+ ~90% Scripts filled Members enrolled Trust their local in 20232 in ExtraCare3 pharmacist5 1. IQV
Slide 69: Technology-enabled operating model
Technology-enabled operating model AI-powered Tech-driven Digital & quality and safety workflow omnichannel capabilities initiatives innovation Unlocking labor capacity to deliver more clinical services ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 69
Slide 70: Our differentiator is consumer engagement
Our differentiator is consumer engagement Delivering health care that is: Seamless and omnichannel Connected and convenient Easier to navigate Local and accessible A sustainable retail business Our engagement will drive better health outcomes and lower costs ©2023 CVS Health and/or one of its affili
Slide 71: Pressures outpace efficiencies and growth
Pressures outpace efficiencies and growth Macro q Reimbursement pressures REMAINING PRESSURE ON PCW EARNINGS q Wage and expense growth Cost q Cross-subsidization efficiencies Script and q Consumer caution front store growth q Declining COVID contribution COGS ©2023 CVS Health and/or one of its affil
Slide 72: Leading change in pharmacy reimbursement
Leading change in pharmacy reimbursement CURRENT STATE FUTURE STATE Antiquated model Sustainable model Complicated pricing Transparent pricing Cross-subsidization Payment based on services provided and cost of drug Moving to a new, transparent model beginning in 2025 ©2023 CVS Health and/or one of i
Slide 73: CVS CostVantage
CVS CostVantageTM Drug cost Markup % We will continue to lower the cost of drugs and will pass through cost improvements to our clients Patient management fee ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 73
Slide 74: New model benefits the drug supply ecosystem
New model benefits the drug supply ecosystem PBMs and Payors • Crucial building block for a more transparent PBM model Retail Pharmacy • Ensures access to care Transparent pricing Sustainable retail economics Value delivered to Enables us to reinvest in our all stakeholders Consumers stores and coll
Slide 75: Pharmacy & Consumer Wellness Key Measures of Success
Pharmacy & Consumer Wellness Key Measures of Success % Retail Industry-leading Providing patients and payors with Consumers connected to % of pharmacy scripts pharmacy drug purchasing value-add Health Care reimbursed share economics services Delivery under new model ©2023 CVS Health and/or one of it
Slide 76: We are committed to delivering strong results
PHARMACY & CONSUMER WELLNESS We are committed to delivering strong results Key takeaways The path forward • Create a more sustainable and transparent Market-leading pharmacy economic model retail pharmacy • Differentiate as the pharmacy and employer of choice Roll-out of CVS CostVantage™ • Deliver e
Slide 77: Pharmacy Services
“© SHealth. Pharmacy Services
Slide 78: Strong results based on value provided to clients
Strong results based on value provided to clients Our customers Our value Our results ~98% $1B+ 13.4% 2023 Specialty Adj. Op. Income 2024 retention1 cost savings3 2019-2023 CAGR4 50%+ 70% 14% Specialty Revenue Fortune 1002 GLP-1 savings3 2017-2022 CAGR5 1. As of November 13, 2023, excluding Centene;
Slide 79: Offering flexibility, lower cost, better outcomes
Offering flexibility, lower cost, better outcomes End-to-end pharmacy benefits management PBM Purchasing Dispensing services economics assets 96% of PBM clients utilize our integrated services1 12% higher member NPS2 47% annual client savings potential3 1. As of September 2023, based on percentage o
Slide 80: We're setting the record straight on our business model
Of rebates passed 98%+ through to clients We’re setting the record ~19% Of Pharmacy Services profit driven by network spread straight on our and retained rebates business model Of claims had fully transparent 75%+ pass-through pricing1 1. As of June 2023 ©2023 CVS Health and/or one of its affiliates
Slide 81: Strong Specialty growth opportunity
Strong Specialty growth opportunity U.S. Specialty market Specialty as a portion of Commercial 52% pharmacy spend1 14% $360B Specialty market size by 20252 CVS Specialty revenue 2017-2022 CAGR (vs. 9% industry growth)4 $100B Biosimilar market size by 20293 1. Commercial Book of Business Q1-Q2 2023 2
Slide 82: CVS Specialty positioned to outpace the market
CVS Specialty positioned to outpace the market What we offer Why it matters Decades of market- Unparalleled reach across 38 centers Expertise of excellence1 leading clinical support Leading Specialty 80%+ of patient records accessible via Omnichannel Technology EMR connectivity2 patient and provider
Slide 83: Proven expertise to navigate drug innovations
Proven expertise to navigate drug innovations Blockbuster Specialty & Next Generation Brands Autoimmune (e.g., GLP-1s) OUR MODEL Formulary & Utilization Management Formulary Formulary Choice Formulary exclusions exclusions/UM Care Management Transform Transform Weight Accordant™ Diabetes Care® Manag
Slide 84: New model will shape the future PBM industry
New model will shape the future PBM industry CVS Caremark TrueCost™ Differentiation Our clients will • Simplified pricing enabling • Best-in-class cost of goods • Continue to have choices members to stay on benefit • Stability of national • Maintain access to lowest • Client pricing that reflects ph
Slide 85: We remain committed to Enterprise growth
PHARMACY SERVICES We remain committed to Enterprise growth Omnichannel Integrated Pharmacy Value-Based Care Pharmacy & Medical Expanding in-home The value >8 in 10 Maintenance care gap closure Choice prescriptions Nearly 70% of our filled at CVS retail1 growth in for PBM health plan clients integrat
Slide 86: Pharmacy Services Key Measures of Success
Pharmacy Services Key Measures of Success Increase in Industry leading % penetration across Growth in Adoption rate of script volume drug purchasing CVS Health Specialty biosimilars economics assets ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 86
Slide 87: We are committed to delivering strong results
PHARMACY SERVICES We are committed to delivering strong results Key takeaways The path forward • Continued sustainable growth Specialty growth • Specialty and biosimilar capabilities drive value • Leading with innovation, including: – TrueCost™ pricing model Lowest net cost – Modernized technology –
Slide 88: Health Care Delivery
“© SHealth. Health Care Delivery
Slide 89: Transformative Health Care Delivery organization
Transformative Health Care Delivery organization A differentiated Core assets Flywheel effect platform poised for with proven results within Health Care continued growth Delivery businesses and impact ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 89
Slide 90: Health Care Delivery platform in 2023
Health Care Delivery platform in 2023 Our results Our customers Our value $6B 8.7M 21% pro-forma 2023 patients and Oak Street Health 2023 revenue1 members1 gross savings rate3,4 14M+ 220+ 2.5x longer 2023 patient unique payors spent with members and member visits1,2 served in-home5 1. Estimated as o
Slide 91: Opportunity for providers of higher quality care
Opportunity for providers of higher quality care Unsustainable Cost 1,2 Poor Outcomes 3 Negative Experience 4,5 $4.3 trillion -2 years >40% U.S. annual health U.S. life expectancy U.S. physician care spend vs OECD average burnout rate ~$1 trillion +52% -1.2 Estimated ‘wasteful’ U.S. diabetes hospita
Slide 92: Our Health Care Delivery Vision
Our Health Care Delivery Vision A fully integrated value-based health care ecosystem utilizing virtual, community and home-based mediums of care, along with traditional provider channels, to drive superior health care outcomes. Powered by Monetized through A fully interoperable IT Risk bearing mecha
Slide 93: Driven by national multi-payor care offerings
Driven by national multi-payor care offerings + >1,200 ~1M lives under 11K+ licensed centers1 management in 2024 clinicians >4,200 employed Growing to 60K+ provider 2.7M projected home providers1 partners in 2024 visits in 2023 1. Across Oak Street Health and MinuteClinic ©2023 CVS Health and/or one
Slide 94: Differentiated results on quality and experience
Differentiated results on quality and experience LEADING U N M AT C H E D PAT I E N T CARE MODEL EXPERIENCE 51% reduction Oak Street in hospital #1 average patient 97% admissions satisfaction: for Oak Street patients1 gross and of members highly satisfied net savings 96% 3 with their Signify In-Home
Slide 95: Signify's strategic growth fueled by CVS Health
Signify’s strategic growth fueled by CVS Health Engage more Do more for members members Improve quality and lower cost for members ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 95
Slide 96: Leader in comprehensive In-Home Evaluations
Leader in comprehensive In-Home Evaluations HOW IT WORKS Engage & In-Home Post-Visit Schedule Evaluation up to 34K+ 2.5x 250K+ 11K+ licensed clinicians members longer spent with case management 2.7M projected scheduled per day members in-home1 referrals in 2023 home visits in 2023 1. Signify In-Home
Slide 97: Expanding capabilities through innovation
Expanding capabilities through innovation Engage & Schedule In-Home Evaluation Post-Visit Optimizing provider Expanding Enhancing drive time through diagnostic tests connection points robust logistics offered during the through advanced and routing home visit technology ©2023 CVS Health and/or one o
Slide 98: Signify is delivering promising early results
Signify is delivering promising early results Connecting to 65%+ immunization of hard to reach appointments Aetna members Engage + Do More more for members members Increasing access 55% with online scheduling Welcome Visit schedule rate for seniors connected to Oak Street by Signify1 1. ~19% of Aetn
Slide 99: National leader in provider enablement
National leader in provider enablement OUR SERVICES Supporting 60K+ provider Clinical Practice partners across programs transformation rural, suburban ~1M lives under and urban areas management in 2024E from clinics to academic $10B spend under medical centers management in 2023E Analytics & Embedde
Slide 100: Combination of CVS Accountable Care and Signify improves quality and lowers costs
Combination of CVS Accountable Care and Signify improves quality and lowers costs for members Medicare Shared Medicare Shared ACO Medicare Savings Program Savings Program REACH1 Advantage Basic Track Enhanced Track Risk Enabled by a unified best-in-class Value-Based Care MSO and technology platform
Slide 101: Strong Oak Street unit economics can further improve with patient growth
Strong Oak Street unit economics can further improve with patient growth ~1 new at-risk patient per center per day (P/C/D) Center Contribution could pull forward J-curve by ~2 years Incremental ~ 1 P/C/D Baseline Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 ©2023 CVS Health and/or one of
Slide 102: CVS Health has ability to meaningfully accelerate Oak Street's growth
CVS Health has ability to meaningfully accelerate Oak Street’s growth Our opportunities Initial results >650K Medicare beneficiaries Approximately 1 in 6 visit CVS stores in Oak Street customers engaged in store geographies each week scheduled a visit >850K Aetna MA and PDP Members >120K Aetna membe
Slide 103: Combining assets improves VBC capabilities across portfolio
Combining assets improves VBC capabilities across portfolio Other Payors Risk-based contracts across payor and program types Best-in-class population Risk bearing MSO: health technology Unified value-based enablement platform Contracting and care model support based on partner need Leading care mode
Slide 104: An example of our local density and presence in the community
CHICAGO: An example of our local density and presence in the community1 Membership by Zip Code 4 – 416 28 51K 416 – 952 clinics patients 952 – 1,760 1,760 – 2,595 215 ~32K 2,595 – 6,934 6,934 – Inf. Signify providers home visits 1,500 40K provider partners at-risk lives 120 ~170K providers patients
Slide 105: Projecting mid-double digit revenue CAGR over the next 5+ years
Projecting mid-double digit revenue CAGR over the next 5+ years est. steady-state margin Home-Based Services (Signify) ~High-teens 2028 Oak Street Clinics ~Mid-teens Affiliate Provider Enablement ~Low- to mid-single digits Retail ~Low-single digits Augmenting retail health Expanding offerings to sup
Slide 106: Health Care Delivery Key Measures of Success
Health Care Delivery Key Measures of Success # of # of Combined # of # of # of Oak Street profitable Oak at-risk lives in-home owned, affiliated Health centers Street Health visits and contracted centers providers ©2023 CVS Health and/or one of its affiliates. Confidential and proprietary. 106
Slide 107: We are committed to delivering strong results
HEALTH CARE DELIVERY We are committed to delivering strong results Key takeaways The path forward • Large opportunity to provide higher Patient and quality care clinic growth • Our businesses create a differentiated, multi-payor value proposition In-home visit growth and • Early enterprise initiativ
Slide 108: Why CVS Health
Strong, sustainable growth, including accelerating growth from Health Care Delivery Powerful cash flow generation Why Balanced capital deployment with growing dividend CVS Health Commitment to sustainable business practices and employee development Accelerating our Adjusted EPS growth over time ©202