lThe CVS Pharmacy logo is displayed on a sign above a CVS Health Corp. store in Las Vegas, Nevada. [+] February 7, 2024. (Photo by: PATRICK T. FALLON/AFP) (Photo by: PATRICK T. FALLON/AFP via Getty Images)
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Glenview Capital Management, the hedge fund that has been the subject of some media reports for pushing CVS Health Management to break up the healthcare giant, denies it is “pushing for a breakup.” are.
The Wall Street Journal published a two-line “exclusive” article Monday with the headline, “Glenview Capital Plan Drives Change at CVS.” In its article, the newspaper described Glenview as a “major hedge fund investor” who plans to meet with CVS Health’s top executives on Monday to “propose ways the struggling health care company can improve its operations.” said. The New York-based publication cited “people close to the matter” as its sources.
By Tuesday afternoon, the hedge fund said: “Newspaper reports have indicated that Glenview is pushing to break up CVS Health, which is false.” Glenview Management said Tuesday afternoon. said in a statement released.
Meanwhile, CVS announced Monday that the diversified provider of medical, pharmacy services and health insurance plans to cut approximately 2,900 jobs, representing less than 1% of its workforce, through a previously announced strategic review. Confirmed. CVS includes a large chain of CVS drugstores. Caremark is one of the nation’s largest pharmacy benefit management companies. and Aetna, the nation’s third-largest health insurance company.
“As our industry faces continued disruption, regulatory pressures, and evolving consumer needs and expectations, it is critical that we remain competitive and operate at peak performance,” CVS said. said in a memo to employees on Monday. “As we previously disclosed, we have embarked on a multi-year effort to realize $2 billion in cost savings by reducing expenses and investing in technology that enhances the way we work.”
CVS said the jobs affected would be “primarily corporate roles” and “front-line jobs” in stores, pharmacies and distribution centers would be spared. “Before taking this action, we prioritized finding cost savings where possible, including closing open job postings,” CVS said in a statement.
This is the latest effort by CVS to improve its corporate operations. The company announced in August that CVS Health Chief Executive Officer Karen S. Lynch would take over the “day-to-day management” of the company’s Aetna health insurance business following recent poor results. Aetna, like its competitors in the health insurance business, has been plagued by higher-than-expected medical costs for its Medicare Advantage plans.
Mr. Lynch successfully led Aetna for several years before being promoted to president and CEO of CVS in 2021, where he co-led the nation’s third-largest health insurance company with Tom Cowhey, chief financial officer of CVS Health. Supervising.
“We would like to thank everyone at CVS Health for their skill and dedication and the work they do every day to make health care accessible, affordable and convenient for our more than 120 million members and customers.” Glenview said in a statement Tuesday afternoon.
The hedge fund’s statement said Glenview was “in dialogue” with CVS executives, but declined to identify who as the talks were “private.”
“CVS Health is a systemically important health care provider whose consistency, quality and insight has the potential to improve the health and health security of one in three Americans,” Glenview said. the statement added. “The company has significant assets across medical and pharmacy benefit management, specialty pharmacy, provider services, and pharmaceutical retail, but has been operating well below its potential and in recent years has is insufficient, creating financial losses and volatility.” That’s putting pressure on employees, customers and shareholders. ”
Meanwhile, CVS Health has not confirmed any negotiations with Glenview. However, hedge funds, institutional investors, and shareholders are known to have regular conversations with corporate executives and investor relations professionals.
“CVS Health maintains regular dialogue with the investment community as part of our robust shareholder and analyst engagement program,” CVS said in a statement Tuesday evening.
