September 22, 2020 Susan Ladika
CVS Health, Walgreens and Walmart are pushing ahead with
ambitious plans for in-store clinics and doctor’s offices.
With COVID-19 still leaving many Americans wary of going to the
doctor’s office for in-person care, large drugstore chains and retailers are
seeing an opportunity for new patients for their in-store health clinics. The
clinics are “a one-stop shop” where patients can see a healthcare provider, get
help managing chronic conditions, pick up medications and have laboratory tests
done, says Kulleni Gebreyes, a principal and physician leader at Deloitte. She
says retail clinics haven’t seen a drop in patient volumes since the outbreak
began in mid-March. Physician groups, including the American Academy of Family
Physicians and the American College of Physicians, have put out policy
statements expressing reservations about the clinics possibly undercutting
primary care, but retail clinics are now an established part of American
healthcare delivery.
The competition is heating up among the retailers. Walgreens
Boots Alliance announced in July that it was planning to open 500 to 700
offices inside its stores over the next five years in partnership with
VillageMD. Walmart opened two additional Walmart Health clinics in June, giving
it four in the South. These Walmart clinics offer dental, vision and behavioral
care, fitness programs and assistance with health insurance issues, as well as
medical services. And, clearly, Walmart is bringing its low-prices game to
healthcare: A price list on Walmart’s website shows a price of $40 for an
office visit, $25 for a dental exam with X-rays and $60 for a therapy session
for new patients. “Walmart is committed to making healthcare more affordable
and accessible for customers in the communities we serve,” Marilee McInnis, a
company spokesperson, said in an email.
One of the virtues of the retail clinics is the price
transparency, a sharp contrast to the blanket of obscurity that cloaks price in
most parts of the U.S. healthcare system (see page 28). Retail clinics allow
patients to “clearly see upfront” the cost of care, Gebreyes says, and the
retail clinic cost is often two to three times lower than more typical
providers. That cost difference may loom large now with millions of Americans
being laid off and losing employer-based healthcare insurance, which tends to
be more generous in Medicaid or ACA exchange plan coverage.
A growth business
Walgreens’ deal with VillageMD put the drugstore chain in more
direct competition with CVS Health, which pioneered the retail clinic with its
MinuteClinics and now has ambitious plans for its HealthHUBs, designed to
provide services to manage chronic conditions. CVS says it has plans to have
1,500 HealthHUBs operating by the end of 2021. In its first-quarter earnings call,
the company said it had almost 100 locations in 17 states up and running in
April, but the conversion of more stores had been put on hold because of
COVID-19.
Walgreens and VillageMD say they expect to have clinics in more
than 30 markets, with more than half located in underserved areas as designated
by the Department of Health & Human Services. After a first phase of five
years, hundreds of facilities will be added, the companies say. The offices
will be located inside existing Walgreens locations, with most taking up about
3,300 square feet, an area approximately three-quarters of the size of a
basketball court. Some will be as large as 9,000 square feet. During the first
five years, VillageMD is expected to recruit more than 3,600 primary care providers.
Walgreens pharmacists will be part of a patient’s care team.
The two companies tested the in-store primary care offices at
five Houston-area Walgreens starting in November. “This rollout is a major
advancement of one of Walgreens Boots Alliance’s four key strategic priorities,
creating neighborhood health destinations,” Stefano Pessina, executive vice
chairman and CEO of Walgreens Boots Alliance, said in the press release. As
part of the deal, Walgreens is investing $1 billion in VillageMD over three
years, and when the deal is complete, the pharmacy giant will hold a 30% stake
in the company.
Last year, Walgreens seemed to be in partial retreat from the
in-store healthcare clinic market. In October, the company announced it was
shuttering the 150 clinics that it operated on its own. But partnership seems
to be the company’s strategy. Walgreens has 230 clinics that are run in
conjunction with local health systems that provide acute medical care, a
spokesperson said in an email. The company also has 14 primary care locations,
including five senior-focused clinics operated with Humana. Four are in the
Kansas City area and one is in South Carolina, and the companies are evaluating
new locations for expansion.
Walmart hasn’t said how many more of its Walmart Health centers
are in the works, but McInnis said expansion is planned.
Higher ambitions
Although many of the current generation of retail clinics only
provide urgent care for minor acute issues such as strep throat or an ear
infection, or routine care such as vaccinations, others have higher ambitions
and can play an important role in helping patients manage chronic conditions,
Gebreyes says.
If someone has diabetes, for example, they can come to a retail
clinic and get the medication and supplies they need, along with foods to help
them eat healthily, she explains. Some have a greeter at the door who helps
patients navigate the clinic and the services available, says Gebreyes. “(They)
respond very positively to it.” The convenience factor also works in favor of
the retail clinics. According to CVS Health, the company has more than 9,900
retail locations and more than 1,000 MinuteClinics. Walgreens says it has more
than 9,000 drugstores.
James Beem, managing director of global healthcare intelligence
at J.D. Power, says patients appreciate the opportunity retail clinics give
them to consult with healthcare providers. Patients say that often at doctor’s
offices they are “rushed in and out without enough time to converse.” (Some
might notice the irony of MinuteClinics giving patients more time.)
Whereas telehealth has taken off during the pandemic, many
patients are hesitant to get in-person care, but “(they) still want to be able
to have face-to-face consultations and be examined without a digital
interface,” says Beem. Now that CVS owns Aetna, the insurer may steer patients
with chronic conditions to HealthHUBs, making CVS Health “100% responsible for
patient care and outcomes,” notes Beem.
One possible drawback to receiving care at a retail clinic is
the lack of integration of your medical information into your core medical
record, Gebreyes says. And there is concern that because of their accessibility
and affordability, retail clinics could drive up unnecessary utilization of
services, she says.
The next frontier in retail clinics could be behavioral
healthcare, such as that offered by Walmart, Gebreyes says. An ongoing shortage
of mental healthcare providers, combined with the stress many people are
feeling because of the pandemic and the rocky economy, are overtaxing
behavioral health services. And even if patients can get appointments with a
mental healthcare provider, they may be reluctant to visit one in person.
“People don’t have great access to behavioral healthcare,” Gebreyes says.
“Retail clinics can be a great place for stigma-free care.”
Susan Ladika is an independent journalist in Tampa, Florida, who
writes about healthcare and business.
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