- CVS Health and Microsoft are forming a strategic alliance to co-develop products around the areas of personalized care and digital health, the two companies announced Thursday.
- CVS said it plans to use Microsoft's computing capabilities to deliver more customized health recommendations when and where consumers need them as the retail pharmacy giant continues to focus on digitally enabled and consumer-centric health services. The two will also look for new ways to leverage technology and machine learning to automate CVS operations and reduce waste.
- Financial terms of the five-year deal were not disclosed.
Organizations have begun relying more heavily on technology since the pandemic began and as more business and operational functions shifted to the digital ecosystem. The healthcare industry has been no different, with COVID-19 driving a historic shift to hybrid models of care integrating both physical and digital touchpoints.
Woonsocket, Rhode Island-based CVS has leaned heavily into that omnichannel strategy as it looks to weave together its virtual and physical assets to capture a greater slice of patients' healthcare journeys — and its corresponding revenue. The retail pharmacy giant recently announced its plans to open primary care delivery locations in a bid to lower the total cost of care by expanding access to preventative treatment and screenings — hopefully resulting in downstream savings for its payer business Aetna — and launch other health-focused store offerings.
And the company has been experimenting with new plan designs integrating both virtual and physical care in a bid to keep patients under the CVS umbrella.
Aetna already has some benefits plans nudging Aetna members to visit its MinuteClinics or HealthHUB locations by charging a low or no copay and recently launched a virtual-first primary care plan to self-funded employers nationwide.
But the Microsoft partnership should help the payer create more customized offerings, CVS said, by better combining information from different areas across the company.
"It's really about that mobility about having your health information available at your fingertips and allowing us as a company to be a part of your digital health," CVS CEO Karen Lynch said Thursday during Forbes' virtual healthcare conference. Lynch noted the pandemic has put a spotlight on the consumer and heightened the need to center healthcare around them, instead of the provider.
A spokesperson told Healthcare Dive that CVS, using Microsoft as a foundation, has built an integrated data platform and suite of machine learning algorithms to address individualized patients' needs "with the right services through the right channels at the right time."
That includes mobile alerts when it's time to receive a flu vaccine, counseling from a pharmacist on potential side effects for a new medication, or issuing customized health recommendations, like nudges when its time for an annual cancer screening for at-risk patients or telling people with heightened risks for melanoma to buy sunscreen.
CVS also plans to scale up retail loyalty and personalization programs using advanced machine learning models running on Microsoft's cloud computing service Azure.
CVS already uses Azure services to automate some tasks.
In specialty pharmacy, for example, CVS has digitized intake — including the 40% of prescriptions that arrive as paper or fax to speed the process — by using Microsoft services like computer vision and text analytics. But under the new strategic partnership, the two will continue to look for ways Microsoft's tech can be used to simplify processes as CVS aims to become increasingly digitized.
Part of that digitization involves CVS selecting Microsoft as its preferred cloud provider, giving CVS (which already has a multicloud presence) access to more than 1,500 Azure business applications.
As more payers and providers look to manage (and monetize) their reams of healthcare data, a host of big-name organizations have turned to Azure and other clouds run by computing giants like Google and Amazon.
In 2019, Walgreens, Providence and Humana reached data-storage agreements with Microsoft; EHR vendor Cerner named Amazon Web Services its preferred cloud host; and Mayo Clinic inked a 10-year deal with Google.
Then, in 2020, Google opened a new office by Mayo's main campus, increasing its investment in the partnership; while hospital behemoth HCA also linked up with Google Cloud on a new data analytics platform for providers.
Also last year, Microsoft launched its first industry-specific cloud offering in healthcare, joining the computer giant's existing services like Azure and telecommunication platform Teams to help providers with telehealth, care management and patient engagement through apps.
Analysts said the move from the Redmond, Washington-based computing behemoth signaled renewed investment in the medical space from tech giants as payers and providers seek tools to help them navigate COVID-19's unique headwinds.
Microsoft announced a major update to that health-specific cloud offering in October in response to customer feedback during the pandemic.
"What we're trying to do is to make sure in fact that malleability of software ... the economic benefits of that can be translated into health outcomes more directly," Microsoft CEO Satya Nadella said at Forbes.
CVS CIO Roshan Navagamuwa said the Microsoft partnership will help CVS with its bid to become more digitized and consumer-centric as the $269 billion company zeroes in on healthcare to drive further growth.
CVS announced last month it plans to close 900 stores — roughly 10% of its footprint — over the next three years to evolve with changing consumer buying patterns due to the pandemic. The revamp will result in new stores with a greater focus on care delivery, including the primary care locations and an "enhanced" version of its health and wellness-focused HealthHUB locations.
As of Sept. 30, CVS had more than 9,900 retail stores as well as 1,200 walk-in medical clinics.