CVS Health Corp. is undergoing a strategic review amid falling profit margins at its retail pharmacies and rising patient care costs from Aetna, accounting for one-third of revenue. Amidst ongoing challenges, the company is exploring options including a potential breakup of its retail and insurance arms in order to enhance shareholder value. This comes as CVS faces headwinds from surging medical costs and lowered Medicare quality ratings, prompting a reassessment of its operational strategy.
CVS is facing significant pressures as both its retail drug business and Aetna insurance arm struggle with profitability. The company's stock has dropped over 20% this year, leading to a proactive approach in exploring various options that could include separating its businesses to streamline operations and improve financial performance. This aligns with a broader trend in the health insurance sector, where rising medical costs continue to challenge profitability and operational efficiency.
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