CVS To Boost Wages After GOP Tax Break

CVS  said Thursday that it will use the tax break it gets from the recently completed federal tax overhaul to raise starting pay for its hourly workers. But that is not all the company plans to do with their tax savings.

CVS also announced Thursday that it was raising its starting wage for hourly workers to $11 an hour from $9. It will not increase health insurance premiums for the 2018-2019 plan year, and it will start a parental leave program that gives employees with a new baby four weeks off at full pay.

CVS also plans to pare debt ahead of its planned, $69 billion acquisition of the insurer Aetna. It also will pump more money into data analytics. This technology can help the company track prescription drug use or monitor data like blood tests to determine if a patient’s health or a condition is growing worse. That can cut health care costs by helping pharmacists or other care providers intervene before a big medical expense like a hospital stay hits.

Company leaders envision turning the chain’s 9,800 stores into a one-stop-shop for health care, a place where patients can get their vision tested, their blood sugar monitored and also see a nurse practitioner and fill a prescription. The CVS-Aetna combination can then use the information it gets from all these visits to guide care and keep customers coming back.

The help slated for data analytics is the “most exciting investment” CVS will make from its tax-cut windfall, said Neil Saunders, an analyst for GlobalData Retail.

“We believe that this, along with more health services in stores, will give CVS a much more significant role in the (health care) sector,” he said in a research note.