Name: MPW Summit 2023: Reinventing American Health Care
Uploaded: 2023-10-10
Duration: 14 min 51 s
Description: Karen Lynch, President and CEO, CVS Health, Interviewer: Alyson Shontell, Editor-in-Chief, FORTUNE

Karen Lynch, President and CEO, CVS Health, Interviewer: Alyson Shontell,  Editor-in-Chief, FORTUNE 

MPW Summit 2023: Reinventing American Health Care 

Conferences

Let's get started. And it's fitting that our first conversation of the summit is with the most powerful woman in business. She also happens to be the most powerful woman in health care. CVS Health President and Ceo Karen Lynch tops Fortune's most powerful women in business list for the third year in a row. That is no small task. Karen is really leading the charge for change and she's on a mission to build a better healthcare industry for America. We have a lot to discuss with her. So let's get right into it. Please welcome to the stage, Karen Lynch and Fortunes editor in chief Alison Chantelle. Oh, the energy in this room is so awesome. It is so nice to be with all of you tonight. Karen, thank you so much here with us. So thrilled to be here and I love being and honored to be with the amazing women and powerful women in this room. So thank you for having me. Absolutely. So Karen, yes, you're a woman but you're just playing like powerful. OK, Karen was our cover of our Fortune 500 issue because CBS health is the number 11 global 500 company in the world. No woman has ever run a company anywhere remotely the size of CBS. We're talking over $300 billion in revenue. Um So, so Karen is the number one on our list. Three years in a row. There's no bribing that it takes to be number one. It's just the size of the business that you oversee is one of the main factors and this lady oversees quite a bit. So, Karen, thank you for being here with us, really thrilled to be here and um you know, running a company like CV S health where, you know, Alan, you said it, um We have purpose and that's really kind of what gets all of us um going every day because we have the purpose of really improving the health of all Americans. And my belief is there's no better company positions than CV SL to do that. So thanks for having me. Absolutely. So I wanna talk about how big health care has gotten and if it's too big in a little bit, but first, let's hear your vision for what you're building and why C has gotten so big for those of you who haven't been following Karen has been on an M and a spree. It might be slowing down a little bit coming up at $19 billion has gone into acquiring companies for CBS in the last few years. Um So what is the vision is CV S going to be my one stop shop for health. Uh Will I need a primary care doctor in the future? Will be CBS? Will someone come to my home from CBS? What is the future? Yes, all of that. But let me, let me just like, uh take a step back because I think it's important if we think about our strategy, you know, I always sort of look to the future and if you think about the next few years, we're going to have unprecedented change, more change than probably the last 50 years, just look at the US population and the demographics, the change that you'll see is both massive and it will be extreme. You know, the advent of technology is, you know, coming upon us faster than a freight train. If you and IBM says that there's 2.5 quintillion uh data bytes on a daily basis. And then you kind of look at um the connectedness world by 2030 $20 billion.20 billion devices will be connected to the internet. And having said all of that health care is the, the costs are unprecedented. And if we don't have radical change in the health care system, we will falter and we will fail in the health care system. And you know, one of the things that, you know, I was thinking about, you know, kind of is re people say you're reinventing health care. No, I'm realizing, you know, health care because you know, everyone goes, it's reinventing, it's reimagining. It's all the re well, I'm realizing the power of what we can do as a company and our vision and our strategy is really about building connections in health care. And we're starting with building multiple channels for accessing health care that we can build locally but have available nationally. We're driving at value based care versus volume based care. We're driving at consumer connections and personal engagement by using technology so that people can be connected to their health care. And we're driving at community convenience because health care isn't about just going to the doctor. It's about being in the community, having transportation to the doctor. It's about being in the home and having access to health and nutrition. So essentially kind of our strategy in a nutshell is connecting all the dots for someone on their personal health care journey. And so we will be in the communities, we will be in the home and we will be digitally connected because we owe it to improve the overall cost, lower, the um lower the cost, improve access and improve quality of the American health care system. But doesn't it remain to be seen if the like big health care industry actually does mean lower cost better care. I mean, there have been some studies that have shown that actually when you consolidate an industry, it's not better for those things. Well, I think it um I think it's better for health outcomes. And if you think about, you know, today, there's $320 billion spent on health equity, people not getting the right care. Our view. And my view is that if we can have people engage in their health care and that they can get the access, we lower the overall cost because you're getting the right treatment at the right time in the right places. And we're helping them navigate the health care system because every single person in this room experiences the health care system in an incredibly fragmented way. And so if you think about CV S health, your journey, you worry about access to financing. We have the insurance so we can keep that sort of um uh uh you know, if you're not, you're afraid that you can't afford it. We have the insurance, we have the benefits of pharmacy and then we have the care through our recent acquisitions. I don't know if it was a free, but it was a lot of money. Um And um our recent acquisitions care in the home care by PC PS care in the communities. Clearly, we have that opportunity to lower costs and improve quality of health care in America. I mean, you said that the demographic is changing in our nation and a lot of the places you've been acquiring have been in the Medicare space. Medicare targeted age. You said there's a Medicare tsunami coming. You just explain that a little bit more. So what's happening is today, um People between the age of 54 54 four and 64 there are more people in that age group bracket than over 65. So that age so we included will be moving into over 65. So because there's so many people, there's gonna be so much more pressure on the health care system because 60 per, 40% of Americans have one chronic condition, 60% of Americans have two or more chronic conditions. Imagine the access, they need the pressure that that will put on the entire health care system. We have to find a better way. Um I wanna talk about some of the acquisition strategy a little bit, but really, I mean, this is an incredibly competitive space, very high deals uh in size. What's your, how do you wanna deal? What's your strategy when you're courting someone? How do you make them come to CBS and TU because you've done this over and over and over again? Yeah, I think, you know, the first thing is, what's your business strategy? What are the capabilities um that you need? You always do a strategy of build versus buy. Um You know, and, and then when you look at um sort of the acquisition, it's OK. How does it fit? Is it strategic? Does it fit strategically? Can you operationally connect it um to your business? And does it financially make sense? And you always have to have those three things when you're looking at any acquisition. And, you know, we picked, um, the acquisitions we picked because we, you know, we looked at our business, we said, um, we're seeing an aging population, we know people don't have access to primary care. We know that value based care is where it's going. We know that there's been a renaissance in home. We, and that's why we bought for the home business that we bought as well. That kind of how we approached our acquisition. And you another goal is to make it much simpler because the health process is really complicated for many, many people. How can technology solve that? Yeah, I, I think the important thing about technology and if you look at what's happening today um with artificial intelligence, I think there's, there's a lot of uncertainty. Um but there's a lot of power with artificial intelligence. And so if we think about the opportunities in health care, artificial intelligence, there's a couple of things, one is we'll see improved patient engagement because we're using technology to connect, we'll see better diagnosis. There's actually been a recent study coming out of Sweden that talks about how artificial intelligence helps with radiology. 20% more insight into um cancers. And those are the good things we're, we're regulating at the same time that we're creating and it's our responsibilities as leaders to make sure that we do responsible artificial intelligence. And I think about it kind of as a Hippocratic Oath do no harm. And in our view in health care, there's three ps, you know, it's powerful, it's personal and it can and it's productive from a personal perspective. It's hey, I can use it to engage and get really insights, but I need to protect those individuals privacy, productive. I say we can, you know, we can use it to bring better information and better tools to our health care workers. But we, but at the same time, we can't lose the human element of interactions in health care. So that would be really critically important for us and then it's powerful, but we need to use it for the betterment and the good and so that we can use it for. How can I understand um social determinants are there ways for us to improve health outcomes. But it really, I mean, I don't know if anyone watched 60 Minutes last night. Um I'm showing my age probably but if I'm definitely showing my age. Um but you know, if you listen to the 60 minute program, 60 Minutes Program last night, he's kind of, there was a gentleman talking, he actually was one of the initial founders of A I, he talked about how uncertain it was and a little bit how scary it could be. So it's our responsibility to make sure that we have responsible A I. So we talked about um even before we came on stage, purposeful leadership. And that also means not just taking care of your shareholders and the environment and many and many other things your employees as well. Um There was an incident in recent weeks where some of your employees staged a walkout. Um It shut down some of the stores and they're fighting for safer conditions. Um and just better work environment. How, you know, you're in a very powerful seat, you touch 100 and 10 million lives with your company every day, 300,000 employees, what, what can you promise and what can you do in your position to help that situation? Yeah. So I think you have to look at the environment, right, the entire uh environment. Um you look at UAW, you look at um Kaiser, there's just a lot of uh unrest in health care, you know, we, you know, um through the pandemic. Um you know, we're still, you know, some of our pharmacists are still feeling some of that burnout. Um I would say the other thing that sort of impacted it was we had unprecedented demand for COVID-19 vaccines and we are at the same level of demand that we were in um 2021. So one of the things that we're boosters, yeah, for the boosters. Yeah, right now. So we're doing more per day than, you know, some, some days we're doing more per day than we were back then. So there's been incredible demand. So what we're doing is, um, you know, we're obviously increasing, um, our scheduling, putting pharmacists, um, we have 30,000 pharmacists. Um, and sometimes we don't get it right in certain markets and we address that market and, um, you know, we didn't actually close any stores. We were able to keep them all open. We actually brought in other, um, pharmacists because in the end, you know, we have a responsibility and an obligation to people that they get their prescriptions and they get access to health and we're all rallied around um to make sure that that's happening at the same time supporting our colleagues. So for people who don't know your backstory, um quite a story growing up. Um a lot of resilience in it. Uh You had a mother who died by suicide. Um You were raised by an aunt who um then died in your twenties. Um And that first made you interested in the health care system and navigate it better. Um You were told early on in your career that women take up space in board rooms and that like you didn't belong, which is of course crazy. Um And now you are sitting here as the most powerful woman to ever run a business in the history of businesses. What's your career domination advice for everybody? Yeah. Don't let your past or any, any setbacks or any failures take the power away of the future that's in front of you. That would be my best advice to you. Thank you, Karen. Thank you all of you and have a great time eating your dinner.