CVS Health to boost wages with $1.5B tax benefit

CVS Health to boost wages with $1.5B tax benefit

WOONSOCKET, R.I. — CVS Well being’s fourth-quarter earnings practically doubled, fueled by a $1.5-billion tax profit that may assist the pharmacy chain increase its rising position in buyer care.
The corporate stated Thursday that it’s going to use the break it will get from the lately accomplished federal tax overhaul to lift beginning pay for its hourly employees and pare debt forward of its deliberate, $69-billion acquisition of the insurer Aetna.
It additionally will pump extra money into knowledge analytics. This know-how may help the corporate observe prescription drug use or monitor knowledge like blood assessments to find out whether or not a affected person’s well being or a situation is rising worse. That may reduce well being care prices by serving to pharmacists or different care suppliers intervene earlier than a giant medical expense like a hospital keep hits.
The potential for better knowledge use is a giant cause CVS stated in December it might purchase Aetna Inc., which covers greater than 22 million folks because the nation’s third-largest well being insurer.
Firm leaders envision turning the chain’s 9,800 shops right into a one-stop-shop for well being care, a spot the place sufferers can get their imaginative and prescient examined, their blood sugar monitored and likewise see a nurse practitioner and fill a prescription. The CVS-Aetna mixture can then use the data it will get from all these visits to information care and hold clients coming again.
The assistance slated for knowledge analytics is the “most enjoyable funding” CVS will make from its tax-cut windfall, stated Neil Saunders, an analyst for GlobalData Retail.
CVS additionally introduced Thursday that it was elevating its beginning wage for hourly employees to $11 an hour from $9. It won’t enhance medical insurance premiums for the 2018-2019 plan yr and it’ll begin a parental depart program that provides full-time workers with a brand new child 4 weeks off at full pay.
A number of different firms even have introduced worker bonuses or enhanced advantages since Republican lawmakers and President Donald Trump sped a $1.5-trillion tax reduce plan into legislation on the finish of final yr. Whereas many companies attribute their beefed up compensation to the tax legislation adjustments, bigger employers are also having a tough time attracting and conserving employees due to traditionally low unemployment charges.
CVS Well being runs the nation’s second-largest drugstore chain and likewise processes greater than a billion prescriptions yearly as a pharmacy profit supervisor, or PBM.
Within the fourth quarter, the corporate earned $three.29 billion. Outcomes adjusted to exclude the tax break totaled $1.92 per share. Income climbed 5 p.c to $48.38 billion.
That topped expectations on Wall Road, the place analysts anticipated earnings of $1.89 per share on $47.54 billion in income, in line with FactSet.