- Walgreens and VillageMD are collaborating to open hundreds of doctor offices inside Walgreens stores.
- The program is the latest move in the industry to combine pharmaceutical and healthcare services.
- Walmart, CVS, and Amazon have also entered this field.
The doctor will see you now… at Walgreens.
Walgreens Boots Alliance, the nation’s second-largest pharmacy chain, announced this month that it will become the first national pharmacy to offer “full-service doctor offices co-located in its stores on a large scale.”
Amid a volatile, hypercompetitive era for U.S. pharmacy chains during the COVID-19 pandemic, Walgreens has decided to get into the physician business.
The company is partnering with VillageMD, a national provider of primary care doctor services.
Together, the companies plan to open 500 to 700 “Village Medical at Walgreens” physician-led primary care clinics in more than 30 U.S. markets during the next 5 years.
The hope is to build hundreds more, Walgreens executives tell Healthline.
It’s an ambitious plan. And somewhat risky.
But it’s probably necessary for the long-term survival of the company, which has been a part of the American business landscape since its first store opened in Chicago nearly 120 years ago.
“By integrating pharmacy and primary care in one location as well as online with our VillageMD’s telehealth programs, this will produce better patient outcomes,” Jamie Vortherms, vice president of healthcare services at Walgreens, told Healthline.
“Another way to think of this is that 6 in 10 patients live with at least one chronic condition that requires multiple medications,” she added. “As a pharmacist myself, I see how big a difference this integrative approach makes for patients.”
Touting this new primary care venture is part of the Walgreens’ effort to morph from a pharmacy into a broader health and wellness destination.
The announcement follows a trial run this past year of several doctor offices in Houston that Vortherms describes as “very successful.”
Walgreens and VillageMD executives tell Healthline that the clinics will integrate the pharmacist as a critical member of the multidisciplinary team to deliver the best healthcare to patients.
In a statement, Stefano Pessina, Walgreens executive vice chair and CEO, said the rollout is a “significant step forward in creating the pharmacy of the future, meeting many essential health needs all under one roof as well as through other channels.”
Walgreens has struggled financially in recent years.
The pharmacy announced in August 2019 that it was closing 200 Walgreens drugstores in the United States.
That news came after the company disclosed it was closing 200 of its Boots pharmacies in the United Kingdom.
The U.S. closures were part of a global “transformation cost management program” launched earlier last year, Walgreens’ representatives said at the time.
The cuts, Walgreens executives insist, were necessary to provide the funding needed to pay for the company’s new technology initiatives and perhaps pursue new developments, such as the new primary care offices.
Walgreens, like so many other companies in so many sectors across the nation and around the world, is trying to figure out how to keep up with Amazon, the online giant.
Walgreens took a major hit in value in 2018 when Amazon purchased PillPack, the well-known online pharmacy. Walmart was also vying for PillPack but was outbid by Amazon.
Dr. Clive Fields, chief medical officer and a co-founder of VillageMD, tells Healthline that Village Medical at Walgreens will provide comprehensive preventive and wellness services.
That includes management of acute infectious disease, minor trauma, and management of chronic disease, which he notes is the category that affects the nation’s healthcare system the most.
The clinics will be operated by board certified primary care physicians and will integrate Walgreens pharmacists as “critical members of VillageMD’s multidisciplinary team all under one roof,” Fields explained.
Fields, who sees patients weekly and serves on staff at Memorial Hermann Memorial City Medical Center in Houston, Texas, as well as the Methodist Hospital and CHI St. Luke’s Health-Baylor St. Luke’s Medical Center, says the clinics will also be staffed by nurses, social workers, and behavioral therapists.
The primary care doctor offices will be staffed by more than 3,600 primary care providers, whom VillageMD will recruit.
The clinics will offer comprehensive primary care across a broad range of physician services. Additionally, 24/7 care will be available via telehealth and at-home visits.
There will be two physicians on staff and available at the clinic.
The majority of co-located clinics will be in existing Walgreens stores. Each clinic will be equipped with state-of-the art technology and design, and provide privacy and a separate entrance and exit from the pharmacy, Fields says.
Fields adds that the Village Medical at Walgreens clinics will accept a wide range of health insurance options and also provide separate entrances from the main Walgreens store.
Most of the clinics will be approximately 3,300 square feet each, with some as large as 9,000 square feet.
They will optimize existing space in the store, which will also still provide a vast range of retail products to customers.
The clinics will integrate Walgreens pharmacists as critical members of VillageMD’s multidisciplinary team all under one roof.
There will also be digital opportunities to deliver healthcare through what Walgreens is calling a “simpler, more accessible, affordable and differentiated patient experience.”
In a statement, Tim Barry, the chairman and CEO of VillageMD, explained: “In the U.S., we spend $4 trillion per year on healthcare, over 85 percent of that is tied to patients with chronic diseases. To improve our healthcare system and reverse the trajectory of health spending, we must meet the needs of all patients.”
Barry added that this partnership will “unleash the power of primary care doctors and pharmacists, enabling them to work in a coordinated way to enhance the patient experience.”
“The results of our initial pilot clinics highlight that these outcomes are infinitely achievable,” he said.
The Walgreens expansion into primary care follows a pilot program this past year in the Houston area.
Vortherms says the program produced strong results and high patient satisfaction.
She adds that information collected from Walgreens’ current clinics shows an integrated primary care and pharmacy approach increases medication adherence, contributes to improved patient outcomes, and results in lower than average emergency room visits, unnecessary hospitalizations, and readmissions.
Fields and Vortherms both explain that in late fall and into next spring Village Medical at Walgreens will add new markets.
“We are still evaluating other market locations, which will be determined based on patient need. We will also see more markets in late fall, including Texas and Arizona,” Vortherms said.
“More than 50 percent of the clinics will be in designated health professional shortage areas and medically underserved areas, so that we can provide more affordable and convenient care to patients,” she added.
This program, of course, is a for-profit venture.
According to a Walgreens official, the company will invest $1 billion in equity and convertible debt in VillageMD over the next 3 years, including a $250 million equity investment completed earlier this month.
Of Walgreens’ investment, VillageMD will use 80 percent to fund the opening of the clinics and build the partnership, including integration with Walgreens digital assets, the company official said.
It’s anticipated, assuming full conversion of the debt, that Walgreens will hold an approximately 30 percent ownership interest in VillageMD at the completion of the investment.
National pharmacy chains are evolving to meet ever-changing consumer needs.
But as disparate pieces of the healthcare sector continue to integrate, there is concern among some physicians and patient advocates that the full merger of doctor offices and pharmacies could be problematic.
Dr. Amy Townsend, a patient advocate, board member of Physicians for Patient Protection, and delegate to the Texas Medical Association, says the Walgreens plan could mean a more corporate, bottom line approach to health and pose potential financial conflicts of interest for physicians that could negatively affect consumers.
“You will have doctors working for a private equity firm, a company that is tied to a pharmacy. There is a lot of money involved in these vertical integrations within healthcare,” Townsend told Healthline.
She says she’s become “frustrated” with the entrenched bureaucracy of the current healthcare system.
“When you roll all of these elements together, will doctors still have full autonomy to treat and prescribe what is in the best interest of patients, rather than what is good for the company’s bottom line?” she said.
When asked that question, Fields says the physicians at Village Medical at Walgreens will be given “full autonomy to do what is right for patients” whether or not it involves more or less profit for Walgreens.
As the national pharmacies continue to enter more diverse healthcare sectors to stay solvent and serve customers, independent pharmacies continue to suffer.
Nearly 1 in 8 U.S. pharmacies closed in recent years with independent pharmacies taking a major hit, studies show.
A University of Illinois at Chicago
Independent pharmacies in both cities and rural areas were three times more likely to close than chain pharmacies.
About 1 in 4 pharmacies in urban, low-income neighborhoods closed, compared to 1 in 7 pharmacies in rural, low-income neighborhoods, the study noted.
In cities, pharmacies serving large numbers of uninsured or publicly insured patients with Medicare or Medicaid were two times more likely to close than other pharmacies, a difference that wasn’t evident in rural areas.
Overall, the pharmacy market in the United States has exceeded $318 billion this year.
The most disruptive force in the U.S. pharmacy sector is happening online, though.
And Amazon is the primary player in this sector.
Walgreens and the other national pharmacy chains are diversifying by providing such things as primary care doctor offices and health insurance.
Can the brick-and-mortar shops realistically compete?
According to a Zion Market Research report, the global e-pharmacy market was more than $42 billion in 2018 and is expected to generate more than $107 billion by 2025.
PillPack, which is now called “PillPack by Amazon Pharmacy,” represents a direct threat to Walgreens, CVS, and Walmart.
CVS made a splash in 2018 when it finalized the purchase of the Aetna insurance company for $69 billion.
CVS also announced last year that it will expand its Houston-based, wellness-focused HealthHUB clinics in 50 additional markets, including Philadelphia, southern New Jersey, and Tampa, Florida, by the end of 2021.
The HealthHUB model is focused largely on chronic disease management, offering services such as blood draws and sleep apnea assessments.
“Improving health outcomes starts with transforming the consumer health experience, connecting with people in their communities,” Dr. Alan Lotvin, the chief transformation officer for CVS Health, said in a statement.
“Our HealthHUBs in Houston are generating tremendously positive customer response. The opportunity to engage with a team of in-store and remote colleagues, including pharmacists, nurse practitioners, care managers and support staff resonates with consumers. We’re thrilled to be creating this seamless, long overdue experience that consumers want,” Lotvin said.
As Healthline reported last year, Walmart positioned itself as an official player in the primary care health market when it announced its first Walmart Health Clinic in Georgia.
Unlike the company’s previously opened clinics, Walmart Health employs physicians along with nurse practitioners and other medical professionals.
Walmart officials announced this month that they’re expanding their health superstore network into Florida next year.
Walmart currently operates four large clinics, which include doctors and nurse practitioners, in Georgia and Arkansas.
Walmart also plans to open additional health clinics in Georgia this year and will look into other locations, such as Chicago.
Meanwhile, VillageMD and Walgreens are also showing a commitment to telehealth.
The companies announced earlier this year the availability of Village Medical telehealth providers on Walgreens Find Care, an online platform that connects consumers with a wide range of health services.
Village Medical notes in a press release that it will be part of a “national network of telehealth providers, connecting patients with convenient and affordable access to quality care from computers and mobile devices.”
This initiative coincides with
“As we continue to work through the COVID-19 pandemic, Village Medical is dedicated to ensuring all patients continue to receive personal, accessible and coordinated care,” Fields said.
“Virtual visits are essential now, more than ever, to ensure the protection of providers, staff, and patients alike. We encourage all patients to leverage Find Care for everything from annual wellness visits to chronic condition follow-up,” Fields added.