CVS Ditches Tobacco: What It Means for Hospitals and Healthcare

On Wednesday, CVS Caremark became the first national pharmacy chain to discontinue sales of cigarettes and other tobacco products.

Effective Oct. 1, cigarettes and tobacco will no longer exist in the company's 7,600 stores. CVS President and CEO Larry Merlo said the decision "is the right thing for us to do for our customers and out company to help people on their path to better health."

However, the new policy will hit CVS' bottom line heavily — the company expects to lose $2 billion in revenue per year because of it.

Retail clinics, like CVS' MinuteClinics, have proliferated throughout the U.S. as a way to provide inexpensive preventive care to patients and link patients to primary care physicians. CVS has now doubled down on its efforts to be more of a healthcare provider instead of merely a pharmacy chain through the new policy. Here are three initial observations on how CVS' decision affects hospitals and the healthcare system at large.

•    Population health is here to stay. Hospitals and health systems have jumped into the world of population health management, or the idea of being responsible for a defined group's health and well-being. Providers now want to ensure patients are healthy in their day-to-day lives, meaning they must curtail practices that lead to poor health outcomes. The second-largest pharmacy retailer halting sales of cigarettes and tobacco is significant. Population health is increasingly becoming society's responsibility, rather than it falling squarely on the shoulders of hospitals.

•    CVS is committing to expanding partnerships with hospitals. Because CVS is doubling down on PHM and preventive health, it will likely continue to create partnerships with hospitals and health systems. Systems like Great Neck, N.Y.-based North Shore-LIJ Health System and Greenville (S.C.) Health System have already established advanced affiliations with CVS.

•    The U.S. healthcare system, outside of providers, is finally taking mass-scale steps to crack down on tobacco usage. In the company's news release, Troyen Brennan, MD, CMO of CVS, said, "Stopping the sale of cigarettes and tobacco will make a significant difference in reducing the chronic illnesses associated with tobacco use." Smoking is the leading cause of premature disease and death in the U.S., with no inherent benefits, and eliminating usage of tobacco has been a goal of the healthcare community for decades. Now, providers are not alone in their fight.

In August 2011, Patrick Quinlan, MD, now retired and former CEO of Ochsner Health System in New Orleans, told Becker's Hospital Review: "There is a two-pronged approach to implement real change. The first step is to recognize the root cause of the problem of healthcare is the disease load and less about how healthcare is delivered. To make the point, if no one was sick, we wouldn't have a healthcare problem. Fifty to 75 percent of diseases in this country are lifestyle-related, meaning that if we shrink the problem — specifically smoking, obesity and inactivity — the problem of healthcare delivery becomes a lot more manageable."

More Articles on Hospitals and CVS:
6 Health System Affiliations With Retail Clinics
Lowering Readmission Rates Through Retail Clinic Partnerships
CVS Caremark's MinuteClinics Blaze Trail for Other Retail Chains

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