HealthOrganization Case Study


CVSHealth is leading player in the United States health care system. Theorganization specializes in the sale of drugs through its retailoutlets (“CVS Pharmacy, Navarro Discount and Longs Drugs”),distributed throughout the country. The company has also invested inprimary care through the MinuteClinics, the largest walk-in clinicnetwork in the United States. Also, the company has a health planunder the CVS Caremark, which provides comprehensive management ofprescribed drugs. It also provides online and telehealth services(CVS Health, 2015). Through an effective growth strategy, improvedemployee welfare, efficient management of resources and customersatisfaction, CVS Health is prepared to face emerging challenges inhealthcare. According to Buff and Terrell (2014), the cost of medicalservices in the United States have increased at a relatively fasterrate in the last 50 years. Additionally, Squires (2012) notes thatthere is an increased need for higher quality medical services anddrugs at affordable prices. It is expected that this trend willcontinue in the next decade. The strategies adopted by CVS Heath areinformed by the need to get ready for the challenges associated withthese trends.

Businessgrowth strategy

CVSHealth is the largest retailer in the pharmaceutical industry, withoperations in all parts of the country. The company has adopted abusiness strategy that will enable it to face emerging challenges inthe American health care system, especially the increased demand forhealth care services and cost of prescribed drugs. Throughout itshistory, its most important strategies involve new outletsdevelopment, diversification, adoption of emerging technologies andfocus on reduction of cost of operations. CVS Health managementbelieves that additional stores in new frontiers, as well as theexisting market, will contribute to its success. It will also enhancethe accessibility of health care services to the population.Consequently, every year, the company has opened hundred of storesincreasing its outlets to over 7, 800 pharmacies and more than 900walk-in clinics (CVS Health, 2015).

Diversificationof products and services, besides continuous improvement, has been animportant aspect of CVS Health strategy. The organization has been amarket leader due to its innovative approaches, which have resultedin the better customer experience. Its recent products includeloyalty programs and MiniteClinics. CVS health has also investedheavily in information technology which increases efficiency,customer satisfaction and reduces the cost of operations. The companyhas installed an automated system that allows pharmacists tocommunicate the prescriptions and track the effectiveness of thedrugs. Growth through acquisition has also been an important aspectof CVS Health. Recently, the company has acquired severalorganizations such as Long Drugs, JC Penny, and Caremark, amongothers, which has increased its customer, based and expanded itsmarkets (CVS Health, 2015).


Thecompany identifies its workforce as the backbone of its operations.It employs more than two hundred thousand employees, who directlycontribute to its success. Although the majority of its employees arepharmacists, it hires a huge number of nurses, mainly in theMinuteClinics, as well as other medical practitioners. Theorganization aims at creating employment opportunities for medicalworkers, in addition to providing excellent working environments. This includes investing in training, opportunities for professionalgrowth, and wellness programs. Moreover, it creates workplaces thataccommodate social and cultural diversity and develops policies thatenhance trust among stakeholders. With the increased shortage ofhealthcare workers, especially nurses, the expansion of CVS Healthoperation is faced with a huge staffing challenge. For example, thetelehealth and MinuteClinics have resulted in increased demand forworkers (CVS Health, 2015). To deal with these challenges, theorganization has established partnerships with professionalassociations such as “National Black Nurses Association” andNational Association of Hispanic Nurses.” The partnerships areaimed at increasing the access to nurses and other professionals fromdiverse populations (Woonsocket, 2016).

Resourcesmanagement to reduce cost of drugs

Thehigh cost of prescribed drugs is one of the biggest challenges in themodern health care system. Through efficient and effective managementof the available resources, CVS Health has embarked on providing itsclients with affordable drugs. However, the provision of cheapersolutions should not be at the expense of the patient’s health.Through the Health Plan, the organization has adopted a‘patient-centered medical home’ model where solutions are basedon electronic health data of the client. This enables the client toaccess comprehensive health care services at an affordable cost. Theservices include acute care, management of chronic illnesses andsmoking cessation. The strategy has significantly reduced medicalexpenses (CVS Health, 2015). Generic substitution of drugs has beenan important approach used by CVS Health to reduce the cost oftreatment. By 2014, the company reported that it has substituted over80 percent of its drugs with generics, which helped in managing cost.The co-pay program that involves both CVS pharmacies andMinuteClinics is expected to reduce the cost of medical services byabout eight percent (CVS Health, 2015).


Asa result of the aging population in the United States, among otherhealth determinants, the role of health organizations such as CVSHealth in the society is expanding. The sustainability of thecompany’s operations in the rapidly transforming sector isdependent on its effectiveness in meeting the needs of its customers.This is through the provision of quality and cost-effectivemedications. It has adopted several initiatives that are aimed atincreasing the accessibility and affordability of medical services.Over the years, CVS’s pharmacists have been some of the greatestadvocates of quality, accessible and affordable drugs. The company iscommitted to providing patient with counsel that enables them toadopt cheaper and effective options in the management of illnesses(Quelch, 2016). Other activities that have increased the satisfactionof customers includes expansion of screening services, telehealth,and MinuteClinics, which enhance faster and efficient access tohealth services (CVS Health, 2015).

Thequality of services is one of the most important aspects of thecustomer satisfaction strategy adopted by CVS Health. The goals ofthe workers at the outlets and clinics are always focused on servicesthat are customer centered. In the MinuteClinics, the health careproviders aim at enhancing patients` experience. An internal surveyindicates that in the year 2015, 94 percent of all customers whovisited the clinics were satisfied with the services provided.Additionally, the clinics have factored in the clients’ feedbacksfor future improvement. The company has introduced the use of textmessages to deal with the issues associated with visits schedulingand waiting times. It is also launching a system that will allowclients to book appointments remotely. At the pharmacies, listeningto the patients has a huge influence on their satisfaction. This hasbeen supported by a toll-free line and a well-maintained contact log. In addition to being a feedback channel, it also facilitatesmedication alerts and follow-ups (CVS Health, 2015).


CVSHealth is a major player in the United States health care system. Itis the largest pharmaceutical retailer, operating thousands of retailstores. It has also ventured in other subsectors in the industrythrough MinuteClinics and CVS Caremark. The company has adaptedbusiness strategies that promote sustainable growth, employeesatisfaction, reduction in the cost of operations and enhancedcustomer satisfaction. These plans have focused on major issues thathave affected the provision of health care services in the last fewdecades and trends in the system. This has improved the ability ofthe organization to deal with emerging, especially in the provisionof quality and affordable prescribed drugs and walk-in clinicsservices.


Buff,M. &amp Terrell, T. (2014). The Role of Third-Party Payers inMedical Cost Increases. Journalof American Physicians and Surgeons,19(2), 75-79.

CVSHealth (2015). Prescriptionfor a Better World.2015 Corporate Social Responsibility Report.

CVSHealth (2015). Whathappens when you start with heart?2015 Annual Report,

Squires,D. (2012). Explaining High Health Care Spending in the United States:An International Comparison of Supply, Utilization, Prices, andQuality. Issuesin International Health Policy.Commonwealth Fund pub. 1595, 10.

Quelch,J. (2016). Consumers,corporations and public health: a case-based approach to sustainablebusiness.New York: Oxford University Press.

Woonsocket,R. I. (2016). CVSHealth Announces Strategic Partnerships with Two NationalMulticultural Nursing Associations,