Your toddler wakes you up in the middle of the night, pulling her ear. So you pull out your handy iPhone otoscope, pop it in her ear, shoot a video, and promptly send it out for diagnosis…to CVS.
That’s the plan for someday, at least, as the $140 billion retail pharmacist unveiled its new Digital Innovation Lab near the Prudential Center in Boston last week. The company says the Lab will help it bring out smart device-driven apps and devices to improve health care.
"We’re going to invent things here that don’t exist anywhere on the planet, things that can be focused on what truly matters: our health," promised Brian Tilzer, CVS Health’s chief digital officer. "We’re using digital to change health outcomes of millions of Americans."
The late-night-toddler scenario? Lab manager Andrew Schwartz demonstrated this on his boss, using a CellScope Oto Home. It took less than 10 seconds to take and transmit the image.
The boss in question—Andrew Macey, CVS Health’s vice president of digital strategy—was quick to temper enthusiasm by admitting that, although CVS already has a working prototype, it still needs to figure out things like whether customers will buy otoscope attachments for their phone, and, since its Minute Clinics aren’t currently open 24 hours, whether parents will find it useful.
The otoscope is just one such device being tested. In the Lab’s main collaboration space is a shelf filled with glucose monitors, blood pressure gauges, and other home health care products and prototypes.
The 12 tools CVS Health will make available are less cool, but might be more useful. One lets you scan your insurance card and send it to CVS, so that your insurance information is up to date (in the future, it might offer customers a digital insurance card). Another lets you scan the barcode on the back of your driver’s license to automatically fill out the 10 fields required for ordering a prescription from CVS. A third is an app to send prescription and other notifications to the Apple Watch.
Then there is "Ellen." Ellen is the in-house nickname given to another new app that lets customers share information with friends and family, who will get a report if the customer hasn’t taken their medication. "We’ve named this after my mother, Ellen, who is the ultimate nag," Tilzer said. CVS also will let people sign up for the Minute Clinic appointments digitally.
The Lab is part of a bigger vision for CVS, which wants to remake itself from fusty pharmacist to new age health care company. That’s why it added Health to its corporate name, and stopped selling cigarettes last year, and why it spent $12.7 billion in May to purchase prescription services provider Omnicare and another $1.9 billion Monday for Target’s in-store pharmacies. CVS now operates almost 1,000 Minute Clinics and says it has 24 million patients. Tilzer said it has the largest retail installation of beacon technology, used to send in-store messages to phones.
Still, it’s CVS. Will it really be able to draw high-tech talent away from the tech and health care startups around Boston?
Yes, said David C. Edelman, a digital marketing principal at McKinsey & Co. Edelman said opening a separate lab away from its Rhode Island headquarters would help CVS draw technical talent it might not otherwise get. "It’s why they’re here; Boston is an incredible hub for health care and tech talent," Edelman said.
The strategy will likely work if CVS stays away from trying to recruit top scientists, said David Sundahl, senior research fellow at the Clayton Christensen Institute for Disruptive Innovation. Sundahl said CVS needs to focus on the part of the market that is not interesting to big health care providers and pharmaceutical companies.
The Lab did draw Macey from Luxottica, the Italian eyeglass maker, where he ran digital until moving to CVS Health six months ago. "Luxottica was great, but look at the difference in impact you can have between eyeglasses and health care," Macey said.
The Lab so far has 40 employees, 25 of which are new hires, and CVS plans to hire another 60.
Meanwhile, that CVS Health’s Minute Clinics have 24 million patients, and their related data, makes it an attractive partner for companies and researchers trying to use analytics to remake health care, said Lynn Banaszak Brusco, the executive director of the Disruptive Health Technology Institute at Carnegie-Mellon University.
Tilzer said CVS will double the amount of money it is investing on digital. He declined to say how much that is, but said it was on par with what other very large companies are spending on digital. "We’re trying to weave digital into everything about CVS Health," he said.
The Lab will help CVS move faster, by giving it a formalized way to deal with new ideas, Tilzer said. While much of its aim is product development, he said it would also do pure research. New mobile phones usually feature new kinds of sensory technology, and the lab will experiment with these to see if they offer CVS potential for new kinds of offerings.
This initiative will also help push the company towards a mobile-first strategy for apps. Tilzer says 82% of CVS customers use smartphones. While one of the new apps is for the Apple Watch, he said CVS doesn’t know how much adoption it will have. (Tilzer wears one himself, but "whether the watch is a good thing [for customers] we don’t know") He said it was unclear whether Americans want to add another gadget to their lives. "That’s the spirit of this lab. For all the things we don't know let’s test, let’s hypothesize."