CVS Health is reportedly meeting with a major investor to discuss ways to improve its business. business.
The pharmacy/healthcare chain was scheduled to meet on Monday, September 30, with hedge fund Glenview Capital Management, as reported by the Wall Street Journal (WSJ) and citing sources with knowledge of the matter. knowledge of the matter.
The meeting is taking place as investors show signs of growing restlessness with CVS, as its shares have fallen 24% this year, according to the Wall Street Journal. A source informed the newspaper that Larry Robbins, the founder of Glenview, holds a significant position in CVS, which makes up $700 million of the $2.5 billion hedge fund. In total, Glenview owns 1% of CVS.on hedge fund. In total, Glenview owns 1% of CVS.
Meanwhile, according to the report, CVS informed employees on Monday that it would be implementing layoffs. The Wall Street Journal mentioned in an internal memo that the reductions would account for less than 1% of CVS’ workforce, equating to 2,900 jobs, mainly in corporate positions.
The layoffs will not affect front-line positions in our stores, pharmacies, and distribution centers, according to a CVS spokesperson who spoke to the WSJ.who spoke to the WSJ.
Last month, CVS Health reported a 2.6% increase in revenues, along with mixed results across the company’s three business segments.
The Health Care Benefits segment, which offers insured and self-insured medical, pharmacy, dental, and behavioral health products and services, experienced a 21.4% increase in revenues compared to the previous year. The company attributed this growth to the expansion of its Medicare and Commercial product lines.
The Pharmacy & Consumer Wellness segment, which dispenses prescriptions and sells health and wellness products as well as general merchandise, experienced a 3.7% increase in revenues due to higher prescription volume.
The Health Services segment, which offers pharmacy benefit management solutions, healthcare services, and provider enablement solutions, reported an 8.8% decrease in revenue due to the loss of a major client and ongoing improvements in pharmacy client pricing.
In other healthcare news, PYMNTS reported last week on the threat that inefficient payment systems pose to health companies.
Research indicates that 80% of financial leaders in the healthcare industry consider streamlining payment processes crucial. However, only 53% have adequately automated their workflows, indicating a reliance on manual methods leading to costly errors and lost revenue.
"About 84% of organizations have reported experiencing financial losses due to outdated accounts receivable processes. Additionally, 85% recognize the urgent need to enhance payment experiences, which highlights the demand for a complete overhaul," as stated by PYMNTS. "Relying on traditional paper statements leads to delays in collections. Almost 70% of providers still use paper for patient communications, with 50% citing it as a primary concern in managing revenue cycles."
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