In a bid to keep apace with its competitor CVS Health, Deerfield, Illinois-based pharmacy chain Walgreens Boots Alliance is launching primary care clinics in select stores in the Houston area.
In partnership with clinic operator VillageMD, Walgreens plans to open five in-store primary care “Village Medical at Walgreens” clinics by the end of the year. The 2,500-square-foot clinics are meant to serve adult patients of all ages and will provide comprehensive primary care services that are integrated with Walgreens pharmacy operations.
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Like many in the space, VillageMD touts their Village Medical model as a way to divert from hospital admissions and engage patients in preventative health services. Services provided by the Walgreens locations will include home-based monitoring of at-risk patients and tele-medicine visits with providers.
While around 400 Walgreens locations currently offer low acuity medical services, the company’s new partnership represents the first integration of a comprehensive primary care practice at their locations. The company intends to use these initial clinics as a test ground for a possible national expansion.
“VillageMD has a strong track record nationally of improving outcomes and reducing the cost of healthcare through their transformative primary care model,” Walgreens Chief Medical Officer Pat Carroll said in a statement. “With more than 120 primary care physicians in their medical group in Houston, we look forward to working with them as we focus on the health and well-being of the community.”
Recently, Walgreens has been struggling in the face of both traditional competitors like CVS and potential new entrants to the pharmacy market like Amazon. Changes to reimbursement rates have also been damaging to the company’s business model.
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Walgreens stock is down more than 20 percent since the beginning of the year and in a recent earnings call CEO Stefano Pessina called the past few months some of the toughest in his tenure at the company.
In response to an analyst question, Pessina said that the company was in the process of reviewing potential acquisition targets.
As part of an effort to diversify its business past pharmacy sales, Walgreens has signed a number of deals in past couple years to advance the company’s efforts to provide clinical services.
The company has partnered with UnitedHealth Group to place MedExpress urgent care centers adjacent to Walgreens locations and has joined a joint venture with Humana to run senior health centers in Kansas City.
Earlier this year, Walgreens signed a strategic partnership with Microsoft meant to merge its retail footprint with the tech giant’s activities in digital health to innovate around new models of care delivery.
Somewhat ironically, Houston is also the launch market for CVS’ HealthHub pilot stores which stock more health related projects and integrate clinical services like diagnostic labs and health screening, as well as wellness rooms with yoga and meditation classes.
The development of HealthHub was a major strategic priority for CVS after the company’s mega-merger with Aetna, which positions the company’s retail locations as a way to shift care delivery to lower and more convenient sites for patients.
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