Glenview Capital, a major shareholder of CVS Health, is reportedly meeting with the leadership of the company on Monday to discuss some fixes to resolve the struggles of the healthcare firm.
The hedge fund has a sizeable stake in the company and it also is invested in Teva Pharmaceuticals and Centene, CNBC reported
The Wall Street Journal recently reported that Glenview planned to meet with the management of CVS including CEO Karen Lynch. Further details about the fixes that Glenview plan to lay down have not yet been disclosed.
A spokesperson for CVS said that the company "maintains a regular dialogue with the investment community as part of our robust shareholder and analyst engagement program."
The spokesperson also said that beyond the regular dialogue, they could no longer comment on the particular type of engagement that it has with individuals or with specific firms.
The company has been dealing with several activists.
In 2019, Starboard Value's Jeff Smith also tried to discuss matters with the company leadership. Earlier this year, another well-known activist fund Sachem Head Capital Management, run by Scott Ferguson, revealed in its regulatory filings that it was also able to establish its position in the company.
Meanwhile, three straight quarters of guidance cuts have not helped the reputation of CVS, leading to a erosion of investor confidence.
The net income of the company has received some whipping due to the high medical cost from the insurance segment. This issue has been dogging the health care industry due to the higher number of seniors having opted to undergo procedures that they have delayed during the COVID-19 pandemic.
The American Medical Association revealed that Athena, owned by CVS, is the third largest health insurer with 11% market share. The insurance unit includes plans under the Medicare Advantage and Medicaid, the Affordable Care Act. They also have plans that include vision and dental care.
Along with the second-quarter results announced in August, CVS announced a leadership revamp following the lackluster performance of its insurance unit. As a result, CEO Lynch replaced the insurance segment's president Brian Kane who left the company based on the current performance and outlook for the segment. The company also disclosed its plan to cut $2 billion in costs over several years by using more AI in its operations.
