Photo: Walgreens
Walgreens last week announced plans to focus on primary care, post-acute care and home care as part of a new Walgreens Health growth strategy.
At an investor event, CEO Roz Brewer said the pivot is “deeply personal” to her. She recalled the final months of her mother’s life, when her family juggled medical bills, numerous doctors and kidney dialysis appointments. The experience was “incredibly confusing and unwieldy and burdensome.”
She added, “This was a time when our family should have been able to focus mainly on just enjoying our remaining moments. But instead we were distracted with many unnecessary tasks and details.”
Walgreens’ ambition is to “help our patients avoid similar scenarios,” said Ms. Brewer, who joined the company in mid-March after roles as Starbucks COO and Sam’s Club CEO.
To support the shift, Walgreens spent $5.2 billion to acquire majority control of primary care provider VillageMD. The chain is set to open at least 600 Village Medical clinics inside its stores by 2025 and 1,000 by 2027, with more than half located in underserved communities. Primary care is seen as a $1 trillion opportunity.
Walgreens claims it is the first national pharmacy chain to offer full-service primary care with physicians and pharmacists co-located all under one roof.
The company has also acquired a majority stake in CareCentrix, a leader in post-acute and home care for $330 million. The purchase provides Walgreens with a new platform to coordinate with health plans, patients and providers to provide home care for patients returning from hospitals. The U.S. post-acute care market is seen as a $75 billion opportunity.
CVS has likewise shifted toward healthcare with the opening of limited-service MinuteClinics and its 2018 acquisition of Aetna joining its pharmacy benefits Caremark business.
Walgreens’ CFO James Kehoe told analysts that, beyond providing full-fledged primary care clinics, Walgreens’ differential includes remaining independent. He said, “We don't have an insurance company directing what we're going to do locally. Our only interest is consumer health and that's why we believe our approach is unique and differentiated in the market.”
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