In an interview with CNBC’s Jim Cramer on Wednesday, CVS CEO Karen Lynch announced her decision to directly oversee the company’s Aetna insurance division following a disappointing quarterly performance. Lynch admitted that the Aetna business has faced substantial challenges and expressed dissatisfaction with its financial results. Consequently, she is committing to improving its financial and operational execution.
CVS adjusted its full-year financial outlook downward for the third consecutive quarter, causing shares to fall by 3.2% by market close. Across the industry, insurers have seen increasing costs as Medicare Advantage patients resume hospital procedures delayed by the pandemic. Additionally, Aetna’s president, Brian Kane, will step down, with Lynch assuming his responsibilities.
Despite issues with Aetna, Lynch highlighted strong performance in CVS’s retail and pharmacy segments and expressed optimism about the company’s momentum heading into 2025. Addressing theft in stores, Lynch mentioned ongoing challenges but noted a pilot program in New York using QR codes for unlocking products. She also confirmed CVS is on target to close 900 stores by the end of 2024, as part of a strategic plan.
Lynch assured, “I know this business well. I know where the opportunities and issues lie, and I am very focused on it right now.”
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Original Story https://www.cnbc.com/2024/08/07/cvs-ceo-says-shes-taking-direct-ownership-to-fix-aetna-business.html
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