How CVS Health Became a Healthcare Giant without Building Hospitals

Welcome to the first edition of The Healthcare Strategist. This newsletter explores bold ideas for those building the future of healthcare; grounded in strategy, shaped by real-world transformation, and guided by a simple belief: that sustainable growth starts with trust, not infrastructure.

Let’s begin.

Few people would have predicted in the early 2000s that CVS, the neighborhood pharmacy known for 30-foot-long receipts, would become the second-largest healthcare company in the world.

CVS was a chain of convenience stores with a side hustle in prescriptions. Yet, by 2024, CVS Health stood just behind UnitedHealth Group in scale, influence, and revenue, which exceeded $357 billion.

CVS operated one of the largest insurance portfolios in the U.S., employed tens of thousands of healthcare providers, and delivered care to over 100 million Americans through its clinics, telehealth services, and newly acquired primary care networks.

This transformation didn't happen by accident. It happened because CVS did something that most traditional health systems still resist. It paid attention to healthcare consumers.

CVS recognized that people weren't just patients; they were shoppers, workers, parents, and caregivers. They had preferences. They valued convenience. They wanted clarity. And they were tired of a system that felt cold and indifferent.

Instead of competing with hospitals, CVS sidestepped them. It began offering basic primary care services through walk-in clinics inside its stores. It added pharmacists trained in counseling and chronic disease support. It built digital platforms that made refilling prescriptions, checking coverage, and scheduling visits easier.

Today, it is one of the largest healthcare companies in the world.

And it achieved all of this without building a single hospital.

This transformation wasn't luck. It resulted from a strategy, but not the kind we usually discuss in healthcare. It wasn't a five-year master plan or a series of pilot projects.

It was more organic; a rhythm, a pattern, a flywheel.

As I studied how CVS grew, I began noticing something subtle but powerful: a self-reinforcing cycle of momentum, a loop that connected the three major arteries of healthcare: the consumer, the provider, and the payer.

Each turn nourished the next, like a system circulating energy and strength through its design.

And once I saw it, I started seeing it everywhere.

The Core Growth Loop: A System That Feeds Itself

At the heart of CVS's evolution is a deceptively simple loop:

More Consumers → More Talented Providers → More Diverse Payers → More Consumers.

This wasn't a linear path. It was connective tissue that kept regenerating.

Each link strengthened the next. When more consumers chose your system, it signaled demand, and as any economist will tell you, supply follows demand. The result? A magnet for top-tier providers who wanted to practice where patients were already choosing to go.

Better providers led to better outcomes. Those outcomes built payer confidence. Payers expanded access and coverage, and that access drew in more consumers.

CVS didn't just stumble into this loop. It engineered it.

But this core loop didn't spin on its own. It needed smaller, faster cycles within it, loops that would generate the momentum to keep the entire system in motion. The first of those loops formed at the point of care; the Care Loop.

The Care Loop: Where Trust Becomes Demand

CVS started earning consumer trust by embedding care into the fabric of daily life.

Pharmacists were trained to support chronic conditions. MinuteClinics made walk-in care part of the errand run. Digital platforms offered low-friction scheduling, refills, and navigation.

It didn't try to outdo the hospitals. Instead, it built something more intimate and immediate, closing the gap between health needs and real life.

That presence became a preference. Preference became loyalty. Loyalty drove demand. And demand pulled in talent who wanted to work in systems that patients trusted.

This is where the first internal loop took shape: the Care Loop (Consumer Loop).

But trust alone isn't enough. To truly transform the system, CVS needed to prove that its model could deliver results, not just convenience. That's where the next loop emerged.

The Outcome Loop: Where Performance Becomes Leverage

CVS didn't stop at convenience. It doubled down on performance.

Its decentralized care model wasn't just more accessible; it proved to be more effective. Patients got in sooner. They stayed on therapy longer. And they avoided complications that would have sent them to more acute settings.

These outcomes weren't a side effect. They were the product. And they gave CVS leverage. Not in the boardroom, but at the point of partnership.

With results in hand, CVS earned the right to co-create benefit structures and to speak the language of payers: risk, results, and return.

This is where the second internal loop clicked into place: the Outcome Loop.

However, performance wasn't enough. Scale required alignment, and alignment needed deeper control of care's financial and structural foundations. That moment came with a single, defining move.

The Value Loop: Where Alignment Drives Scale

The 2018 acquisition of Aetna marked a pivotal moment, not just because of its scale but also because of its synchrony.

With Aetna, CVS became a payer, a provider, and a platform.

Insurance products could now be designed based on real-world care insights.

Care teams operated with less friction. Consumers experienced a smoother journey, from coverage to care to recovery.

It was the loop between data, dollars, and delivery.

This was the Value Loop, a tight circuit that brought clarity to a system often blurred by complexity.

With all three loops spinning, care, outcomes, and value, the whole system came into view. What CVS had built wasn't just a service or a network; it was a growth engine!

The Full Picture: A Growth Engine in Motion

Once all three loops were in motion, the system began to accelerate.

Each loop didn't just feed the next but amplified each other.

Consumers drove volume, providers delivered outcomes, and payers unlocked scale.

CVS didn't grow by chance; it grew by closing the loop. CVS grew by design!

CVS built alignment where others built departments. CVS created continuity where others created silos. In a fragmented healthcare landscape, that alignment became a rare and formidable advantage.

The Future of Growth is Consumer-Driven

CVS did not grow by building more infrastructure. It grew by creating connective tissue between the three major actors in healthcare: the consumer, the provider, and the payer. It did what the best systems do intuitively; it closed the loop.

• For consumers, it simplified access. It made healthcare feel less like an institution and more like an everyday service.
• For providers, it created new pathways to reach patients, supported by data and technology.
• For payers, it offered visibility, outcomes, and cost control; all in one network.

For decades, hospitals have grown by adding beds, expanding service lines, and lobbying for contracts. Growth was an internal pursuit: build more, hire more, and bill more.

But what if the most resilient growth doesn't come from what you build, but from who chooses you?

That's the quiet insight behind CVS's rise.

Growth didn't start with infrastructure.

It started with the individual.

The shopper. The parent. The patient.

And once that flywheel began to spin, everything else followed.

In future editions of The Healthcare Strategist, I'll explore how other systems are finding their flywheel and how leaders can build not just programs, but momentum.

The systems that will lead tomorrow won't be defined by the size of their infrastructure, but by the strength of their consumers' affinity.

They will be the ones that patients return to, not out of necessity, but by choice.