Can CVS CEO Karen Lynch fix broken health care?

Aug 28, 2023

Good morning, Broadsheet readers! There are four openly LGBTQ CEOs running Fortune 500 companies, an economist makes a comeback, and Fortune's Maria Aspan digs into CVS CEO Karen Lynch's role in American health care. Happy Wednesday! – Big Health's Big Test. Karen Lynch is the most powerful woman in business—and one of the most powerful people in health care. As CEO of CVS Health, she makes decisions that affect the health—and, ultimately, the lives—of more than 110 million people. So how is she wielding that vast power?

"I always think, sitting in this chair, ‘How would I want to be treated? How would I want my family members to be treated?’ " Lynch told me last month, in an interview for the cover story of our new Fortune 500 issue.

"You’re not going to get it right all the time," she acknowledges. "But how do we get better?"

For CVS—and most of its competitors—the answer has been to get relentlessly bigger, as Erika Fry and I report in our feature on the booming business of Big Health Care. CVS is No. 6 on the new Fortune 500 list, one spot below rival UnitedHealth, and their industry dominates our 2023 list of the biggest companies in business like never before. Health care companies account for eight of the top 25 U.S. companies by revenue, and with $2.77 trillion in combined revenue, the industry is now the second-largest on the Fortune 500 list, just behind finance.

CVS's evolution beyond toothpaste and toilet paper began long before Lynch, but she's leading an ambitious—and expensive—new pivot into primary care. She joined CVS in 2018 when it bought Aetna, the nation's third-largest insurer, for $70 billion. Since becoming CEO in 2021, Lynch has gone hunting for more M&A, and this spring, she spent about $19 billion on two companies, primary care provider Oak Street Health and home health care specialist Signify Health. Together, these two mergers will bring more than 10,600 physicians and other medical providers under CVS's roof.

The goal of all of this expansion, Lynch and other top health care executives say, is to fix America's broken health care system. By owning the services to address a patient's every need, companies say they can deliver "value-based care" more efficiently and conveniently; provide more services to lower-income patients and other underserved populations; and, ultimately, head off the chronic conditions and serious illnesses that drive up costs. Buying up businesses is about "bringing the pieces together to help drive value," UnitedHealth chief medical officer Dr. Margaret-Mary Wilson told Erika.

But it's a big promise—and one that faces plenty of skepticism among doctors, patients, lawmakers, and industry critics. So can Big Health care really make Americans healthier?

Lynch, for one, acknowledges the size of the task she's taking on with CVS's M&A spree. "My personal passion is, ‘How do we improve the health care system?’" she told me. "We have the opportunity to really drive engagement, simplicity, effectiveness—and to drive patients to the right care at the right time, in the right places."

Read the full story here.

Maria [email protected]@mariaaspan

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