CVS Caremark Smoke Out

CVS Caremark Pharmacy has been getting a lot of attention for its recent decision to stop selling tobacco products in its stores.  The CEO essentially said that selling tobacco products didn’t make sense for a company in the health business.  CVS Caremark has received praise from health advocates nationwide and even President Obama issued a statement applauding the company.

While the story sounds nice, I’m a little skeptical as to its true motives here.  The profit margins on cigarettes are slim (14.6% in 2011) and have been slowly decreasing over the years.  Even 7-11 has recently said that it expects cigarette sales to decline and that it doesn’t see tobacco products as being part of its long-term business model.  So perhaps CVS took the opportunity to capitalize on what was just a smart business move.  Removing part of a business that is not as profitable as other parts just makes sense.

If it were truly serious about making sure that CVS Caremark was a health store, wouldn’t it eliminate its soda and junk food aisle?  Well that’s unlikely to happen anytime soon because the profits margins on food items are 55%.  I’m curious to see if others will follow suit in the name of health.

HR and Benefits folks should take note.  If you communicate a wellness program that claims you care about the health of your employees but don’t get rid of the junk food in the vending machine, your employees will call you out for being hypocritical.

The Doctors are really into Telemedicine

The Wall Street Journal ran a piece this week about a new telemedicine startup called Doctor on Demand, that was featured on a recent episode of the TV talk show Dr. Phil.  It turns out that Dr. Phil’s son, who is the executive producer of the talk show “The Doctors” is one of the founders of Doctors on Demand and Dr. Phil himself is one of its major investors.  Repeat after me: conflict of interest.

My company jumped on the telemedicine bandwagon a few years ago and has been using a company called MDLive as our telemedicine provider.  Utilization has been lower than we had anticipated but we do see a place for it in the benefits package.  Employees have been using the service for ailments such as eye infections and asthma, as well as for mental health issues like anxiety and depression. 

As the competition in this space has grown, MDLive has signed on Dr. Travis Stork as their celebrity spokesperson.  Dr. Stork may be best known as the bachelor on season 8 of the TV show “The Bachelor,” but is also one of the doctors on the TV show “The Doctors."  Are you following?

So the executive producer of "The Doctors" started a telemedicine company and one of the stars of his show signed on to represent his competition.  “The Doctors” has a segment on the show where they showcase the Doctor on Demand app (again, conflict of interest).  I wonder how the folks at MDLive feel about their spokesperson using the competition on his talk show.