CVS Health president and CEO Karen Lynch tops Fortune's Most Powerful Women in Business list for the third year in a row.
CVS is number 11 on the Fortune's Global 500, with more than $300 billion in revenue. In a conversation with Editor in Chief Alyson Shontell at our Most Powerful Women Summit, Lynch said her aspirations for CVS are even bigger.
"If you think about the next few years, we're going to have unprecedented change, more change than probably the last 50 years," Lynch said. "Just look at the U.S. population and the demographics, the change that you'll see is both massive, and it will be extreme."
CVS invested nearly $19 billion to acquire Signify Health and Oak Street Health last year. Lynch says the moves will help build a new American health care system—with better tech, access, and systems.
Lynch also spoke about her unique path to success, and recent demand for the COVID booster.
Watch the video interview above or see the full transcript below.
Alyson Shontell: 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 for being here with us.
Karen Lynch: So thrilled to be here. And I am honored to be with the amazing women and powerful woman in this room. So thank you for having me.
Alyson Shontell: Absolutely. So Karen, yes, you're a woman, but you were just playing like powerful. Okay, Karen was our cover of her Fortune 500 issue because CVS Health is the number 11 global 500 company in the world. No woman has ever run a company anywhere remotely the size of CVS, we're talking over $300 billion in revenue. So Karen has been 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 have received quite a bit. So Karen, thank you for being here with us.
Karen Lynch: Really thrilled to be here. And, you know, running a company like CVS Health where you know, Alan, you said it, we have purpose. And that's really kind of what gets all of us 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 positioned than CVS Health to do that. So thanks for having me.
CVS' future of health care
Alyson Shontell: Absolutely. So I want to talk about how big health care has gotten into too big in a little bit. But first, let's hear your vision for what you're building. Why CVS has gotten so big. For those of you who haven't been following. Karen has been on an M&A spree and might be slowing down a little bit coming up. But $19 billion has gone into acquiring companies for CVS in the last few years. So what is the vision? Is CVS going to be my one stop shop for health? Will I need a primary care doctor? The future will be CVS, will someone come to my home from CVS? What is the future?
Karen Lynch: Yes, all of that. But let me let me just, take a step back. Because I think it's important as we think about our strategy, you know, I always want to 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. And IBM says that there's two and a half quintillion data bytes on a daily basis. And then you kind of look at the connectedness world, by 2030, 20 billion devices will be connected to the internet. And having said all that, health care 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, people say you're reinventing health care. No, I'm realizing, health care, because you know, everyone goes it's reinventing it's reimagining, 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 healthy 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 lower the cost, improve access and improve quality of the American health care system.
Alyson Shontell: But doesn't it remains to be seen if the like big health care industry actually does mean lower costs 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.
Karen Lynch: Well, I think 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 engaged in their health care, and that they can get the access will 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, and in an incredibly fragmented way.
And so if you think about CVS Health, your journey, you worry about access to financing, we have the insurance so we can keep that sort of, 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 free, but it was a lot of money. And through some acquisitions, care in the home care by PCPs care and the community's clearly we have that opportunity to lower costs and improve quality of health care in America.
The 'Medicare tsunami'
Alyson Shontell: And 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, the Medicare targeted age, you've said there's a Medicare tsunami coming. That's right, you just explained that a little bit more.
Karen Lynch: So what's happening is today, people between the age of 54 and 64, there are more people in that age group bracket than over 65. So that age, though, me included, we'll be moving into over 65. So because there's so many people, there's going to be so much more pressure on the health care system, because 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.
Alyson Shontell: I want to talk about some of the acquisition strategy a little bit. But really, I mean, this is an incredibly competitive space, very high deals in size. How do you want to deal? What's your strategy? When you're courting someone? How do you make them come to CVS to to you because you've done this over? And over and over again?
Karen Lynch: I think you know, the first thing is, what's your business strategy? What are the capabilities that you need? You always do a strategy of build versus buy? And then when you look at sort of the acquisition, it's okay, how does it fit? Is it strategic? Does it fit strategically? Can you operationally connect it 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 the acquisitions we picked because we, you know, we looked at our business, we said, 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 Sir the home business that we bought as well. So that's kind of how we approached our acquisitions.
How technology can help
Alyson Shontell: And another goal is to make it much simpler, because the health process is really complicated for many, many people. How can technology solve that?
Karen Lynch: Yeah, I think the important thing about technology and if you look at what's happening today, with artificial intelligence, I think there's there's a lot of uncertainty. But there's a lot of power with artificial intelligence. And so as we think about the opportunities in health care, artificial intelligence, there's a couple things. One is, we'll see improve 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 helped with radiology 20% more insight into cancers. And those are the good things 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 the Hippocratic Oath, do no harm. And in our view, in health care, there's three P's. 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 think we can, 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'll 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 social determinants? Are there ways for us to improve health outcomes?
But really, I mean, I don't know if anyone watched 60 Minutes last night, I'm showing my age probably, but if definitely showing my age. But you know, if you listen to the 60 Minutes program last night, he's kind of skipped. There was a gentleman talking, he actually was one of the initial founders of AI, he talked about how uncertain it was in a little bit how scary it could be. So it's our responsibility to make sure that we have responsible AI.
Walkout and demand for COVID booster
Alyson Shontell: So we talked about even before we came on stage, purposeful leadership. And that also means not just taking care of your shareholders and the environment in many, many other things, your employees as well. There was an incident in recent weeks where some of your employees staged a walkout. It shut down some of the stores and they were fighting for safer conditions. And just better work environment. How you know, you're in a very powerful seat, you touch 110 million lives with your company every day for 300,000 employees. What can you promise and what can you do in your position to help that situation?
Karen Lynch: Yeah, so I think you have to look at the environment, right? The entire environment. You look at UAW, you look at Kaiser, there's just a lot of unrest in health care. You know, we, you know, through the pandemic, you know, we're still, you know, some of our pharmacists are still feeling some of that burnout. I would say the other thing that sort of impacted it was we had unprecedented demand for COVID 19 vaccines. And we're at the same level of demand that we were in 2021. So we're doing more per day that, you know, 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, we're obviously increasing our scheduling, putting pharmacists, we have 30,000, pharmacists, and sometimes we don't get it right in certain markets. And we addressed that market. And we didn't actually close any stores, we were able to keep them all open, we actually brought in other 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 to make sure that that's happening at the same time supporting our colleagues.
Alyson Shontell: So for people who don't know your backstory, quite a story, growing up a lot of resilience in it. You had a mother who died by suicide, you were raised by an aunt, who then died in your 20s. And that first made you interested in health care system and navigating it better. You were told early on in your career that women take up space in boardrooms and that like you didn't belong, which is, of course crazy. 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?
Karen Lynch: 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 will be my best advice to you.
Alyson Shontell: Thank you, Karen. Thank you, all of you.
