Some corporations are so big, so intertwined with the economy and our daily lives and current events and politics, that it can be difficult to grasp the true scope of their importance.
CVS Health is one such company. With some 300,000 employees, more than 9,000 stores, and upward of 40,000 physicians, pharmacists and nurses on staff, CVS wields outsize influence in the American health care system. And with its 2018 merger with Aetna, the health insurance giant, the company now insures more than 20 million people, too.
Last year, Karen S. Lynch took over as chief executive, replacing the longtime CEO Larry Merlo. For Ms. Lynch, who came up through Aetna and worked at other insurers before that, assuming the new job meant confronting a host of immediate challenges.
CVS stores remained open throughout the pandemic, though its army of office workers has been working from home for nearly two years. The pharmacies became vaccine distribution centers and testing sites. A jury last year found that CVS and other drugstore chains contributed to the opioid epidemic. And Ms. Lynch, who prefers to steer clear of politics, said she was at once holding firm in the company’s commitment not to donate to Republicans who voted against certifying the 2020 presidential election results, while also continuing to lobby against more public options for health care.
Ms. Lynch, who rides her Peloton to relieve stress and champions physical and mental health, says she is unfazed by the myriad complexities, and often comes back to the words of her aunt, who raised her.
“The reason I’m as decisive as I am is because when I was growing up, my aunt told me that you were going to have to make decisions in your life, and you’re going to have to live with those decisions right, wrong or indifferent,” she said. “When you make decisions as often as I do, you’re going to make a bad call. You just have to readjust.”
This interview was condensed and edited for clarity.
You took over as CEO in the middle of the pandemic. What are some of the challenges you’re facing as the leader of this big diversified company at this moment?
I never thought I would take over as CEO in the middle of a pandemic. But throughout my entire career I have been faced with a number of different kinds of challenges and changes and big strategic issues, and this is different, but it’s no different.
I stepped back and said, “What is our true purpose of the company?” What I want to do is make sure that people have access to high-quality, affordable health care, and that we as a company can help people navigate the health care system. Because we’re so central in people’s lives, we have the ability to be even more central in people’s lives. That’s the mark I really want to make, is to be part of someone’s everyday life where if they’re healthy, they’re engaging with us to stay healthy. If they have health issues, they’re engaging with us so that we can help manage and navigate that.
Can you give me give me some examples?
Well, let’s just start with a pandemic, right? So you come to CVS for your test and we started that, you know, way back when you come to CVS for your vaccines. We have done virtual primary care as a change in how people think. We’ve added behavioral health specialists to our stores, which is really different. We’re going to move into the expansion of health care services. I don’t want people to think about CVS Health as just that drugstore. I want them to think about it being a health care company.
How big of a problem is shoplifting for your stores right now?
There are certain parts of the country that are worse than others, but it’s not having a material impact on our financial results. It is a safety issue, however, for our employees. So one of the things that we’ve done is we’ve made more investments in security.
How is the labor shortage affecting the company? Are you having a hard time hiring people?
It is a big challenge for us. We have increased our wages. We paid pharmacy bonuses in the past year. We’ve done big hiring days. But it is a constant balance and a constant battle.
You said you were going to raise your minimum wage to $15 an hour by this summer. Is that right?
We put it in phases. So we’ve been rolling it out over time, and I don’t know that it’s enough. We obviously moderate wages in different parts of the country and I’m going to continue to evaluate it.
What do you see as the most effective ways that we could reduce health care costs for everyday Americans? And what’s your company’s role in doing that?
There’s a couple of things. One is there’s the site of care. Our role is offering an alternative site of care, either in our retail locations, or in the home with virtual connections. We’re entering into the primary care space because we believe that primary care has real significant influence over the cost of health care.
And I’m pretty passionate about the fact that the head is attached to the body, and most people experience behavioral health issues when they are experiencing physical health issues. We only deal with the physical health. We don’t deal with the behavioral health part, and I think there’s more we can do.
“I think this is going to be an endemic thing, and I think we’re going to see these annual shots.” —Karen Lynch
When it comes to insurance, many people would say that more public options would go a long way toward reducing health care costs. Why is it that CVS is so opposed to things like Medicare for All, the public option and other public health insurance measures?
Let’s just look at Medicare Advantage, for example. That’s a program that is working, and it’s private-sector-led, even though it’s government-funded. With the private sector, you have more opportunities for competition and opportunities for innovation and more opportunities to create new paradigm shifts in health care. And so that’s why we’ve been opposed to these public options, because we really believe that the private sector will continue to innovate.
But we’ve had decades of private control and competition, and it hasn’t gotten us the desired outcome. Why should people believe that more of the same is going to produce a different outcome?
What makes you think the government would be better at it? Just look at the number of government programs that aren’t working as effectively as they should.
Your pharmacists were instrumental in putting needles in arms. How are you, if you are, working to address vaccine skepticism, which is still pervasive in this country?
We’ve been working in the communities to educate people. We actually put vans in communities and we’ve used all of our resources. When we started, we put the stores in these underserved communities first, and about 40 percent of our vaccines are in those underserved communities. Obviously there’s more work to be done. It’s education on all of our parts. We’re doing our part. I know the government is doing their part. And I’ve also done it with a little bit of a stick with my own team, by doing a vaccine mandate.
We’re in health care, and this is a public health issue, and we should be on the forefront of that. I don’t think vaccines are going away. I think this is going to be an endemic thing, and I think we’re going to see these annual shots. That will be part of a role we continue to play in keeping America healthy.
A jury found CVS and other pharmacy chains were partly responsible for the opioid crisis. I know CVS is appealing, but when you look at that ruling, shouldn’t pharmacists have a responsibility to monitor and call out suspicious prescriptions?
Our view and the historical view is that pharmacists are trained to fill the prescriptions of physicians. Now, subsequent to all that stuff that happened, we’ve put controls in place so that the pharmacists are flagging those things that don’t look particularly right. So we are doing it now. But they’re not the doctors, and they’re not the ones who prescribe. And we didn’t just do it on CVS. On the Aetna side, one of the most egregious things we saw was dentists. So one of the things we put in our sort of policy was limiting the number of opiates that we would pay for dentists to use. The entire system has responsibility.
We’re speaking on Jan. 6. How are you thinking about the company’s role and your role as a CEO in engaging with political issues at this very fraught moment?
You don’t want me to wax about politics. I do worry about it. I think there are certain points in time where I think CEOs should step in, when they affect their businesses or their employees. And there are certain times that that’s none of our business. It’s a delicate balance. We have to make sure that your first interest is in your colleagues, your customers and then your shareholders, and make sure that you’re doing what’s right for them.
Many companies have said they will no longer make political contributions directly or through PACs to members of Congress who voted against certifying the 2020 presidential election. Where is CVS Health on that specific issue?
On that specific issue, we have made statements that we would not support certain politicians that were involved in that, and we have stood our ground there.
Is there any reassessment of whether or not you even want to be making contributions to Republicans or Democrats at all?
It’s something that weighs heavily on my mind. As a company, there are certain things that we advocate for and things that we support. And I’ll be honest with you, this is not an easy one, and it is something that I spent a lot of time with my government affairs team on. We debate it. I don’t think I have an answer for you. I’m trying to again take a really balanced approach and not do things that are going to harm the company.