- CVS Health shuffled responsibilities for its leadership bench on Thursday in a bid to better align business segments, as the retail health giant undergoes corporate restructuring following flagging earnings.
- CVS named CFO Shawn Guertin president of its health services segment, and said former Humana CFO Brian Kane will join this week as president of Aetna health benefits arm. CVS first announced Kane would be joining CVS in April.
- CVS’ care delivery businesses Oak Street Health and Signify Health will continue to operate under health services umbrella. Their respective heads, Mike Pykosz and Kyle Armbrester, will now report directly to Guertin.
CVS announced a corporate restructuring plan in early August, after the healthcare giant’s profit fell 37% year over year in its second quarter. Along with terminating certain initiatives, like the clinical trials unit CVS shuttered earlier this year, the Woonsocket, Rhode Island-based company plans to lay off 5,000 U.S. employees.
The goal is to reallocate resources to growth areas like healthcare services, according to CVS CEO Karen Lynch.
In his new role, Guertin is responsible for overseeing and growing CVS’ care delivery assets. Those include value-based medical group for seniors Oak Street and home care provider Signify, which CVS bought for $10.6 billion in May and $8 billion in March respectively, along with MinuteClinic, its chain of walk-in medical clinics.
The president of health services role has been vacant since April, when Amar Desai left CVS to return to rival UnitedHealth.
The new leadership structure “simplifies access to our multi-payor capabilities and better aligns the way we serve clients," Guertin said in a statement.
CVS has been focused on integrating healthcare delivery assets in a bid to capture more care delivered in home and community settings, while better managing costs through its health insurance arm by nudging beneficiaries toward CVS-owned, low-cost sites of care.
It’s a strategy being pursued by a number of other heavy hitters in the healthcare space, including UnitedHealth and Humana. For CVS, which bought health insurer Aetna in 2018, it’s also an opportunity to further diversify revenue away from its legacy retail pharmacy business.
Pharmacy chain Walgreens has also been pivoting away from its drugstore roots, as retail pharmacies face heavy Wall Street scrutiny that’s been pressuring stock prices.
CVS’ C-suite shakeup comes a week after Walgreens CEO Roz Brewer stepped down after fewer than three years on the job.
As part of Thursday’s restructuring, current Chief Pharmacy Officer Prem Shah will also become sole president of pharmacy and consumer wellness. Previously, Shah was co-president with Michelle Peluso.
Peluso, who is CVS’ chief customer and experience officer, will also oversee patient experience across all of CVS’ care delivery and customer service channels.