CVS Health reports $2.1 billion profit in Q1

CVS Health reported $2.1 billion in profit and surpassed 25 million members through its insurance arm, Aetna, according to the company's first-quarter earnings, posted May 3.

The company closed on its acquisition of in-home care company Signify Health for $7.8 billion in March, adding more than 10,000 clinicians to its network. CVS also closed on its $10.6 billion acquisition of Medicare-focused Oak Street Health, adding more than 170 medical centers across 21 states to its network.

"We delivered another strong quarter while executing on the strategy we outlined in December 2021, leading to the close of the Signify Health acquisition followed quickly by Oak Street Health. These additions are core to our strategy and will help unlock future growth as we push further into value-based care, which prioritizes keeping people healthy," CVS President and CEO Karen Lynch said.

CVS Health

  • Total revenues in the first quarter were $85.3 billion, an 11 percent increase year over year.

  • Operating income in the first quarter was $3.4 billion, a 2.8 percent decrease year over year.

  • Net income was $2.1 billion in the first quarter, down from $2.4 billion year over year.

  • The company lowered its year-end guidance to a range of $8.50 to $8.70 in earnings per share.

Healthcare benefits segment

  • Total revenues in the first quarter were $25.9 billion, up 12.1 percent year over year.

  • The medical benefit ratio increased to 84.6 percent in the first quarter, compared to 83.4 percent during the same period last year. The increase was driven by a continued normalization of care utilization and "lower impact from favorable development of prior years' healthcare cost estimates."

  • Medical membership as of March 31 was 25.5 million, an increase of 1 million members since the same time last year and primarily driven by an increase in individual exchange enrollment under the commercial segment. There are 18 million commercial members, 3.4 million Medicare Advantage, 1.3 million supplement members, 2.8 million Medicaid members, and 6.1 million Medicare Part D plans.

Health Services Segment (formerly Pharmacy Services)

  • Total revenues in the first quarter were $44.6 billion, up 12.6 percent year over year. The increase was attributed to a higher volume of pharmacy claims, growth in specialty pharmacy and brand inflation, and partially offset by pharmacy client price improvements.

  • Adjusted operating income was $1.7 billion in the first quarter, up 14.2 percent year over year.

  • Total pharmacy claims processed increased 3.7 percent on a 30-day equivalent basis in the first three months of the year. The increase was mostly driven by net new business, increased utilization, and the impact of a severe cold and flu season. Increases were partially offset by a decrease in COVID-19 vaccinations.

Pharmacy and Consumer Wellness Segment (formerly retail)

  • Total revenues in the first quarter were $27.9 billion, up 7.8 percent year over year.

  • Adjusted operating income was $1.1 billion, down 27.9 percent since the same period last year. The decrease was primarily driven by pharmacy reimbursement pressures, decreased COVID-19 vaccinations and diagnostic testing and investments in internal operations.

  • Prescriptions filled on a 30-day equivalent basis increased 2.5 percent in 2023.

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