Alumni Profile Reshaping Healthcare
CVS Health executive Karen S. Lynch (MBA’99) on fixing healthcare in America
In October 2018, Rhode Island–based CVS Health, the second largest US drugstore chain and a major pharmacy benefits manager, completed its nearly $70 billion purchase of Connecticut-based Aetna, the country’s third largest health insurer.
The New York Times reported that the acquisition reflected the continued blurring of boundaries in the healthcare industry—in particular, the boundary between insurance companies responsible for paying for care and providers responsible for delivering it—and may have been designed to insulate CVS Health should Amazon enter the pharmacy business.
Aetna President Karen S. Lynch called the acquisition an “unprecedented opportunity to reshape healthcare as we know it.” Combining Aetna’s medical information and analytics with CVS Health’s pharmacy data, she said at the time of the announcement, would allow CVS Health to understand and treat the whole patient. Lynch (MBA’99), now an executive vice president for CVS Health and president of its Aetna business unit, says the combined company is already working to increase access to healthcare, particularly through redesigned CVS Health stores known as HealthHUBs, where customers can receive medical tests and checkups, take nutrition and yoga classes, and get help managing chronic conditions. Three pilot HealthHUBs opened in Houston, Tex., in early 2019 and the company plans to have 1,500 locations nationwide by the end of 2021.
Lynch believes the CVS Health and Aetna deal will increase industry competition. “I think any transformation of an industry allows for new entrants, allows for more innovation,” she says.
Business Insider recently named Lynch to its list of 100 people transforming business, and Fortune has included her among its 50 most powerful women in business for the past three years. Lynch became Aetna’s first female president in 2015 and has held executive positions at Magellan Health Services and Cigna.
Questrom: Do you want to be a disruptor in your industry?
Lynch: I don’t think we have a choice about whether or not we want to be. We are disrupting the industry. The combination of CVS Health and Aetna is a clear indication that there’s big change coming in the healthcare industry. This combination will be disrupting the industry in ways we probably haven’t even thought of yet.
You have previously described the US healthcare system as badly broken. What do you think it will take to fix that system?
I would point to a few things. Number one: more accessibility. Your location shouldn’t limit your access to care. I think technology will dramatically increase access.
Number two: simplicity. I can tell you from my personal experiences—dealing with my mother and my aunt when I was very young, and then just recently with having hip surgery—the system is extremely challenging to navigate, to coordinate across multiple providers and systems. We can simplify by helping people connect the dots, helping them with the logistics of managing their care.
Third, healthcare needs to be more personal. It’s really important that your healthcare is delivered to you when and where you want it, and my healthcare is delivered to me when and where I want it. With data, analytics, and technology, we’ll be able to make sure that people are getting the personalized care they need.
What health or business trends are you closely watching?
I spend a lot of time watching what’s going on with technology, with data and analytics and artificial intelligence. There will be a time when, because of all the data and all the patterns that we’ll be able to see, we’ll be able to proactively know when someone may be getting sick, or may have cancer. I’m paying attention to those data companies that are looking at information from your Fitbit, information from your doctor, the medications you’re taking, information about your sleep patterns. There’s a lot going on in technology, driving to these personalized insights, that we’re closely watching every day.
Why do you think consumers should welcome the merger between Aetna and CVS Health?
Our strategy as a combined company is focused wholly on the consumer. It’s rooted in our commitment to fundamentally change the consumer experience—centered on their personal needs, and primarily delivered in their home, in their local community, and virtually. What CVS Health allows Aetna to do is offer 10,000 new front doors to health: we have now an unparalleled set of local access points for consumers, to reach them where and when they want to be met. This combination will allow consumers to have a frictionless and differentiated experience. Our expectation is that we will offer a better consumer experience, and that we will lower the overall cost of healthcare.
CVS Health began as a retail company, and it’s been transforming into a wellness company. How does an organization make such a substantial pivot?
CVS Health has been on a long journey to transform into a healthcare company. They made a big, bold move of eliminating tobacco sales, which was a significant hit to their revenue and made a bold statement that they want to be a health and wellness company. And then, obviously, with the purchase of Aetna, they solidified their focus on health and wellness. The company has been evolving over time. This isn’t a seismic shift. It’s a continuation of a journey that they’ve been on for a number of years.
"I believe women should get out of their comfort zones and take risks in accepting assignments. I personally did jobs that I wasn’t quite ready for, that I was a little uncomfortable taking…. I also think women should seek out sponsors. A lot of my success, early on, was because I had great sponsorship.”
This isn’t your first merger: You oversaw the integration of Aetna’s 2013 acquisition of Coventry HealthCare. What did you learn from that experience of bringing two companies together?
I learned that culture trumps strategy. That’s probably an overused statement, but when you bring two companies together, you can never underestimate the importance of culture. Clearly, an important part of making transactions successful is communication. Even before we closed that transaction, I went on a road tour where I held town halls and visited probably 80 percent of Coventry employees, welcoming them to Aetna and answering any questions they had. My mantra was, “I’m going to answer the questions that you have. If I don’t know the answer, I’ll get back to you with an answer. And if I can’t tell you the answer because it’s confidential, I’ll tell you that too.” Giving them a good sense of where we were headed, what our plans were, even before the close of the transaction, made the combination of the two companies go incredibly smoothly.
What do you think it takes to be a good business leader?
First, courage. All leaders need to have the courage of their convictions. Authenticity is another critical attribute of a leader. You’ve got to maintain open and honest relationships. Leaders don’t hide behind the mask of authority—they get into the thick of it, so they can effectively transform and drive change in meaningful ways. And you have to be a risk-taker, taking risks around business innovations. Lastly, business leaders need to have a clear strategy and a clear execution plan around that strategy.
What do you think that women can do to assume more prominent roles in their organizations?
I believe women should get out of their comfort zones and take risks in accepting assignments. I personally did jobs that I wasn’t quite ready for, that I was a little uncomfortable taking. As a CPA and a financial professional, I took a human resources job at one point in my career, and I grew exponentially. Healthcare is a people business, and having that human resources role really helped me think about how best to lead people. I also think women should seek out sponsors. A lot of my success, early on, was because I had great sponsorship.
You began your career as a CPA at Ernst & Young and then moved into the healthcare sector. What attracted you to the healthcare industry?
A couple of life events fueled my interest. When I was 12 years old, my mom died by suicide. That fuels my passion for holistic care. I have a huge passion for integrating mental health with physical health. The second life experience that I had was with my aunt who raised me after my mom died. My aunt died when I was in my early 20s. She had lung cancer. She had breast cancer. Sitting in a hospital room in your early 20s, not knowing what questions to ask your doctor, not knowing how to navigate the healthcare system, not knowing how to engage to make sure her total care was being optimized—that has really fueled my passion around making sure that when we deliver products and services, we think about the family unit, we think about the local services that can supplement someone’s healthcare experience. It also fuels my passion around engagement and simplifying the overall healthcare experience.
This conversation has been edited for length and clarity.
