CVS Health is reportedly considering a strategic shift that could involve breaking up its integrated businesses, including its health insurer Aetna and pharmacy benefit manager Caremark. This decision follows a troubling year marked by Aetna's underperformance, as the company has faced increased scrutiny over rising utilization costs. With CVS's stock having declined 12% in the past year, investors are closely monitoring this potential change, which could significantly alter the healthcare landscape.

The move comes as CVS is not alone in reassessing its integrated healthcare strategy; Walgreens has already exited its partnership with VillageMD for retail clinics, and Walmart has closed its retail health locations. This trend indicates a retreat from a more consumer-focused approach to healthcare, raising questions about the effectiveness of vertical integration. Analysts express mixed feelings, suggesting that while a breakup may help CVS address its operational challenges, it could also create uncertainties regarding the valuation of its individual businesses.

As CVS explores this strategic review, the future of vertical integration in healthcare hangs in the balance. Industry experts are particularly curious about the fate of Caremark and how it fits into a potential breakup scenario. The ongoing scrutiny of pharmacy benefit managers, coupled with rising pressure from employers seeking cost-effective solutions, signals that CVS's decision could have broader implications for how integrated healthcare companies operate in the future.

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