MinuteClinic hits milestone, continues to drive utilization

9/14/2009

MINNEAPOLIS —MinuteClinic has shifted much of its efforts to driving utilization, and the results are paying off as the clinic operator hit a milestone during the second quarter and serviced its 4 millionth customer. Furthermore, traffic at the roughly 500 clinics was up 51% for the quarter, as comp visits rose 33% year-to-date.

While the numbers are impressive, Tom Ryan, chairman, president and CEO of CVS Caremark, has indicated that the hard work is far from over. Utilization is, and will continue to be, a major focus for MinuteClinic as it expands its service offerings and takes an even greater role in healthcare reform.

“The challenge for MinuteClinic is to drive utilization, and that’s where we are focused,” Ryan told analysts during the company’s Aug. 4 second-quarter conference call. “You are going to see it with the new leadership in the program. Andrew Sussman is going to work with [Troyen Brennan, EVP and chief medical officer]; we’re working with health plans, we’re working with physician groups, but the real rate-limiting step here is utilization.”

As previously reported by Drug Store News, Sussman was named president and COO of MinuteClinic and SVP and associate chief medical officer of CVS Caremark. He succeeds Chip Phillips, who now serves as president of TheraCom, a CVS Caremark company that provides support to biotech and pharmaceutical manufacturers. Sussman, who joined the company this month, is responsible for all clinical services and daily operations at MinuteClinic. He also will take charge of the continued development of MinuteClinic in retail healthcare services.

Ryan said MinuteClinic will further drive utilization by getting more third-party plans and offering more services. As it stands, the company added more than 16 million lives to its network during the second quarter, and 80% of its visits in the quarter were third-party paid. However, MinuteClinic will continue to look to grow in network-covered lives as utilization rises when people have coverage.

“[MinuteClinic] is a microcosm of what you want in healthcare reform,” he said. “It’s accessible, it’s affordable and it’s good quality, which are all the things that the administration and Congress were talking about.”

CVS Caremark is investing 5 cents to 6 cents of diluted earnings per share in MinuteClinic and expects it to be less of an investment in 2010 and even less in 2011. The company expects to break even in early 2012, or possibly sooner.

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