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CVS is now closing 851 stores over three years, bringing the total number of closures to over 900.
CVS Health is also reorganizing its leadership and slashing expenses in response to falling sales and the closure of hundreds of shops around the country.
The healthcare company has lowered its prediction for 2024 for the third time in a row.
Executive Karen Lynch will assume control of CVS Health’s insurance division on August 7, 2024, according to the company’s announcement.
Upon Brian Kane’s departure from the organization, she will take over as Executive Vice President.
Kane’s departure from CVS Health comes after only about a year on the job, suggesting he didn’t stay long.
According to the article, CVS Health has frequently lowered its financial estimate for 2024, in part because the business has encountered difficulties as a result of an increase in claims from its Medicare Advantage plan.
For those 65 and up, the federal government offers an alternative to the standard Medicare program in the form of Medicare Advantage plans, which are commercial insurance options.
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According to the Associated Press, the healthcare provider also claimed that it has suffered losses due to declining quality ratings for such plans and pressure from the Medicaid programs it oversees in several US states.
CVS Health’s health benefits division had a 39% decline in adjusted operating income to $938 million during the quarter, contributing to a precipitous decline in overall earnings.
For the company’s pharmacy operation, which runs thousands of drugstores across the country, adjusted operating income—which does not include things like capital gains—also took a 12% hit.
The outlet reports that CVS Health had to deal with restricted reimbursement for certain medications while filling more prescriptions in the second quarter of the year.
Customers bought fewer COVID-19 test kits, which contributed to a decline in-store sales, according to the corporation. This decline did not affect the pharmacy.
Lynch reportedly told The Associated Press that CVS Health is preparing a $2 billion cost-cutting effort that will span multiple years.
