CVS Health is Serious About Growing its Clinic Business

CVS Health is serious about growing its clinic business. On Monday, USA TODAY reported that CVS Health plans to acquire Target’s pharmacy and clinic business for $1.9 billion.

Healthcare reform is producing a surge in newly insured people seeking care, and hospitals are under severe pressure to keep pace.

“This long-term strategic relationship will certainly benefit the patients, the employees and the shareholders of both companies,” CVS Health CEO Larry Merlo said in a conference call.

In addition, a primary care provider shortage is predicted to limit access to care. This is where CVS Health’s new acquisition will come into play with more than 1,660 Target pharmacies offering accessible care in 47 states.

Demographic change exacerbates the challenge, with a steep rise in the ratio of elderly to young, adding yet more demand. Retail health clinics may be the “release valve” to the strained healthcare system and the future of care.

CVS Health has been the leader in the retail clinic industry to date, but other retailers like Walmart and Walgreens are poised for growth. The move to acquire Target’s pharmacy and clinic business allows CVS Health to solidify its lead in the clinic business.

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