Rebecca Pifer@RebeccaMPifer Sept. 2,
2020
Dive Brief:
·
Walmart is partnering with primary care player Oak Street Health
to bring its clinics to three Walmart supercenters in the Dallas-Fort Worth
area as Walmart continues to grow its retail clinic offerings.
·
The new clinics are scheduled to open this fall. They will offer
preventive primary care and urgent care services, with extended hours for
walk-ins and same-day appointments, per a Tuesday release on the news.
·
Eight-year-old Oak Street, which now has a network of 60
value-based primary care centers, focuses primarily on managing the health of
seniors in Medicare, but all ages can receive services at the new locations.
Oak Street closed its IPO last month, and raised about $377 million in gross
proceeds. Its shares were up 9% in premarket trading Wednesday to 138% over the
IPO price of $21.
Dive Insight:
Walmart has been investing more
heavily in retail care clinics over the past few years. After launching its
first "health superstore" in Georgia last year, the Bentonville,
Arkansas-based company quickly added three more locations and now plans
to expand the network into Florida early
next year. Health services at the superstores go well beyond primary care, and
include therapy and behavioral health, dentistry and educational and community
events focused on health and wellness.
Walmart, which brought in more
than $514 billion in revenue last year, and other health-focused retail
behemoths like Walgreens and CVS Health have been building out their clinical
footprints as consumers, facing skyrocketing healthcare prices, increasingly
look for low-barrier care close to the home. Retail clinics also have the added
benefit of leading to higher script-writing and front store sales for their
owners, and are usually trialed in traditionally underserved, highly populated
areas like the Dallas-Fort Worth area.
The competition to build out market
presence quickly is stiff.
CVS now has more than 200 of its
large, wellness-focused locations, called HealthHUBs, up and running, in
addition to its more than 1,100 MinuteClinics. HealthHUBs devote 20% of floor
space to healthcare products and services. CVS plans to have 1,500 operational
by the end of next year.
In early July, Walgreens invested $1 billion to open
full-service doctor's offices in its stores managed by VillageMD, a medical
services provider. Walgreens plans to open 500 to 700 clinics in the next five
years, making it the first national pharmacy chain to begin building a primary
care infrastructure in its retail locations using doctors, as opposed to nurse
practitioners.
Amazon is also currently trialing a small series of
primary care centers for its own employees run by medical group Crossover
Health, and didn't quash the idea it might eventually expand to the public at
large if they're successful.
Oak Street's clinics will be
replacing Walmart's own care clinics at the three Texas stores in Arlington,
Benbrook and Carrollton. Texas has the highest number of Walmart stores in the
country.
It's the first major retail
partnership for Oak Street, which currently has clinics staffed by its
interdisciplinary care teams in nine states: Illinois, Michigan, Indiana, Pennsylvania,
Ohio, Rhode Island, North Carolina, Tennessee and Texas. The majority of its
some 90,000 patients are under capitation arrangements, where Oak Street
contracts with Medicare Advantage payers on a per-patient, per-month basis and
assumes full financial risk for their patient population.
After years of aggressive growth
and an ongoing nationwide expansion, the Chicago-based primary care center
operator went public in July, saying it planned to use
the funds to continue expanding in new and existing markets. The IPO was well
received, with shares up almost 91% following Oak Street's first day of
trading, signaling strong investor confidence.
Correction: A previous version of
this story misidentified Walgreens.
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