Walgreens dives into primary care with clinic expansion

Business News

This June 2020 photo provided by VillageMD shows a Walgreens with an adjoining VillageMD in Houston. Walgreens will squeeze the primary care clinics into as many as 700 of its U.S. stores over the next few years in a major expansion of the care it offers customers. The drugstore chain said Wednesday, July 8 that it will partner with VillageMD to set up doctor-led clinics that also use nurses, social workers and therapists to provide regular treatment for patients. (VillageMD via AP)

Walgreens will squeeze primary care clinics into as many as 700 of its U.S. stores over the next few years in a major expansion of the care it offers customers.

The drugstore chain said Wednesday that it will partner with VillageMD to set up doctor-led clinics that also use nurses, social workers and therapists to provide regular treatment for patients.

The retailer will redesign stores that get the clinics, narrow their shelves and pull products like tobacco and other grocery items to make room.

Drugstores like Walgreens and rival CVS Health Corp. typically tuck small clinics in the back of their stores to dole out flu shots or treat minor ailments like sinus infections or poison ivy. But Walgreens said last fall it was going to close nearly 40% of those clinics.

The company has been looking for a way to provide more comprehensive care, said executive Alex Gourlay.

“We are very confident that this is the right model for the future,” said Gourlay, Walgreens global co-chief operating officer.

He noted that the primary care clinics will make it easier for pharmacists to work with doctors to make sure medicines don’t conflict or to help explain prescriptions to patients.

The clinics will recruit doctors who already have patients and will focus on caring for those with chronic diseases. They will use social workers to make sure patients have stable food sources and living situations. The clinics also will lean on things like telemedicine to help stay in touch with patients.

“It’s really about a different model of primary care,” said VillageMD CEO Tim Barry.

Insurers and other payers have become more interested in covering care or assistance delivered outside the doctor’s office. The idea is to keep patients, especially those with chronic conditions, healthy and out of expensive hospitals or emergency rooms.

Last year, CVS Health laid out plans to expand a new store format that provides dietitians and helps people monitor chronic diseases but does not include doctors.

Experts say these retailers are picking a ripe target for their care expansions since a lot of health care spending is focused on chronic diseases like diabetes. But they face competition because many doctors offices are expanding the help they offer.

And stores like Walgreens also may be challenged in getting patients used to visiting their locations regularly for care, said Dr. Ateev Mehrotra, a Harvard Medical School professor who researches health care delivery.

“I think there’s an inherent uphill battle in convincing patients they should go to a store for their primary care,” he said, noting that this could be especially challenging with older patients who account for most adult primary care visits.

Walgreens and VillageMD tested their clinics in the Houston market and plan to expand there, as well as Phoenix.

Deerfield, Illinois-based Walgreens Boots Alliance Inc. runs more than 9,200 stores in the United States. It expects to open 500 to 700 primary care clinics in 30 markets in the next five years.

Walgreens said in a release that it intends to build “hundreds more” after that. It will aim to put the clinics in areas that may have a shortage of primary care doctors or an older-than-usual population.

The company runs thousands of stores in other countries too, but officials said they were not planning to expand their primary care clinics internationally.

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Follow Tom Murphy on Twitter: @thpmurphy

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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