Susan Ladika

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Retailers such as CVS Health and Walgreens Boots Alliance may force traditional providers to rethink the way they deliver healthcare. The drugstores ramped up care during the heart of the COVID-19 pandemic, often providing more convenient and less costly alternatives.

“Traditional providers have to think like retail providers going forward: convenient, transparent and cost-effective,” says Arielle Trzcinski, a principal healthcare analyst at Forrester, a research and advisory company. The retail clinics tend to be less expensive for consumers than traditional providers and urgent care centers, Trzcinski notes, and the walk-in access is an advantage over having to schedule an appointment.

By offering COVID-19 testing and vaccinations and providing medical care at their in-store clinics, retailers built up “a lot of goodwill that they will carry forward beyond the pandemic,” Trzcinski adds. “It’s an opportunity for them to continue to build on the trust consumers have started to have in them.”

A survey of 2,200 adults conducted in the spring of 2021 by the Morning Consult, a survey company, found that 35% of the respondents had received healthcare in person at a retail clinic since the pandemic began in early 2020 and that 8% had received care at the clinics often.

A different survey of 500 consumers and 250 retail healthcare executives released by the technology company UPshow found consumers were inclined to go to retail health clinics during the pandemic because they wanted to avoid doctors’ offices that might be crowded. The clinics in the chain drugstores also allowed them to combine medical care and shopping so they could limit trips away from home. Not all of the findings from the UPshow survey are positive for retail health clinics. Almost half (47%) of those surveyed indicated that they were not “completely confident” in the quality of care provided at retail health clinics.

Although CVS and Walgreens have made sizable bets on retail healthcare being part of their futures, their approaches vary. CVS is focusing on developing in-store HealthHUBs where its customers can get a variety of healthcare services, including primary care for chronic conditions and behavioral healthcare. Rather than developing its own healthcare services, Walgreens has focused on relationships with other providers, including a partnership created last year with VillageMD to develop doctors’ offices in its stores. But Dan Clarin, managing director at Kaufman Hall, says neither Walgreens nor CVS “offers every service to every customer on their own — they’re a convener of services.” He compares the companies to Amazon as a platform to connect consumers with the products they want.

The drugstore chains don’t have the retail healthcare business entirely to themselves. Walmart has set up clinics in some of its stores, offering a variety of services, including dental, optometry, primary care and X-rays. Walmart has acquired MeMD, a telehealth provider. With that acquisition, Walmart has filed paperwork to do business in 37 states. according to the 

. The retailers are hopeful that their retail clinics will attract younger people, Clarin notes. The Morning Consult survey found that half of 18- to 34-year-olds had gone to a retail clinic during the pandemic, compared with just 1 in 5 of those aged 65 years and older. Younger consumers are less likely to have a primary care physician. They also have “less brand loyalty,” Clarin says, and focus on “experience and convenience.”

CVS has offered healthcare at its MinuteClinics for 25 years and has expanded to hundreds of locations inside its drugstores and in Target’s brick-and-mortar stores. But its more recent focus is on its HealthHUBs, which are billed as providing a wider array of services and services consumers will use over time. not just on an emergent basis. Part of the investment in HealthHUBs is a consequence of the company’s acquisition of Aetna in 2018 for
$69 billion. CVS calls itself “the leading health solutions company.”

“Over the last few years, we have pushed the boundaries to change people’s perception of their neighborhood drugstore, as well as to add value, offer more innovative services and provide convenient, affordable and accessible care,” Ryan Rumbarger, senior vice president of retail store operations for CVS Pharmacy, said in an email to 

.® At the end of the first quarter of 2021, the retailer had about 800 HealthHUBs, Karen Lynch, president and CEO of CVS Health, said in a call with investors. According to previously announced plans, the company’s goal was to have 1,500 of the hubs up and running by the end of 2021, but Lynch said the company would have about 1,000 in operation by that time.

CVS is offering COVID-19 vaccinations at 9,600 sites and providing testing for the virus at thousands of locations, many of which serve vulnerable communities, Rumbarger said.

CVS’ most recent move is adding licensed therapists at certain HealthHUB locations as demand for behavioral health services has soared in light of the pandemic.

Walgreens is focusing on partnering with providers In late 2020, it announced it was closing 150 clinics that it operated on its own. It still partners with local health systems to operate clinics. But the company’s major play in retail healthcare is its partnership with VillageMD, a primary care company headquartered in Chicago. The plan is to develop at least 600 VillageMD clinics, which operate under the name Village Medical, in more than 30 markets over the next four years, with hundreds more to follow, Rick Gates, Walgreens’ senior vice president of pharmacy, said in an email to 

. Currently there are more than 50 Village Medical clinics in Walgreens stores, most of them in the Sunbelt.

During the pandemic, the drugstore giant has conducted more than 8 million COVID-19 tests and provided more than 25 million vaccinations, Gates said. With millions losing their jobs, the company has lowered prices on hundreds of medications, he said,

Physicians and others have raised concerns about retail healthcare further fragmenting American healthcare. But Gates said data from the current Village Medical clinics indicate improvements in medication adherence and fewer emergency room visits, unnecessary hospitalizations and readmissions for patients with chronic conditions.

Walmart is calling its in-store clinics Walmart Health. The retail giant opened its first clinic in Dallas, Georgia, about 30 miles outside Atlanta, in 2019. Now it has clinics in stores elsewhere in Georgia, Texas and Arkansas. A price list on the company website for Dallas, Georgia, showed that a Walmart Health office visit costs $40; a dental exam with X-rays, $25; and a new patient therapy session, $60. The retailer’s wide range of services and low prices make it “convenient and cost-effective,” says Trzcinski, the Forrester analyst. Walmart has also priced many generic medicines at $4, which may help with getting people to take their medication as prescribed. “Cost is a huge barrier for folks being able to adhere to their medications,” Trzcinski says.

In late June 2021, Walmart acquired telehealth provider MeMD. “Today people expect omnichannel access to care, and adding telehealth to our Walmart Health care strategies allows us to provide in-person and digital care across our multiple assets and solutions,” says Cheryl Pegus, executive vice president of Walmart Health & Wellness, said in a news release announcing the planned acquisition.

Although Walmart doesn’t have as large a footprint as CVS and Walgreens do, it has a strong presence in rural areas, where access to healthcare may be hard to come by, notes Clarin.

is an independent journalist in Tampa, Florida, who writes about business and healthcare.

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But CVS, Walgreens and Walmart differ in how they are setting up in-store health clinics.

Retailers Want to Provide You Healthcare, Not Just Sell you Stuff 

Many midsize health plans contract with the large PBMs that dominate the market and are owned by their rivals, such as CVS Health and Cigna, noted Javier Gonzalez, Pharm.D., chief growth officer at Abarca, a PBM based in Aventura, Florida, and San Juan, Puerto Rico, this morning at the second day of the Annual National Conference of the Pharmacy Benefit Management Institute® in Orlando, Florida.

Is that wise? Now midsize plans are “starting to think about their competitive landscape,” Gonzalez said. By contracting with the PBMs, “they are putting revenue dollars in their competitors.” PBMs owned by CVS Health, UnitedHealthcare and Cigna control almost 80% of the market, and the five largest PBMs together hold about 90% of the market. But venture capital and private equity investors are supporting new PBMs that rely heavily on technology, noted Gonzalez.

Some midsize insurers plans are thinking of what other alternatives might be available to them and are making requests for proposals from smaller PBMs. “They have enough scale to potentially make different types of investments,” Gonzalez said. Working with smaller PBMs “gives health plans a chance to unbundle services,” he says.

Midsize plans might opt to work with independent PBMs, might build or buy their own PBMs, or might insource certain PBM functions, using either their own resources or obtaining certain services from independent PBMs. “It creates an opportunity for (smaller) plans to not be so dependent on these large health plan conglomerates,” he said. Gonzalez praised the large PBMs — “the big PBMS do a great job” — he also said that “at the end of the day, it is really about health plans having more control over their own destiny.”

Plans are looking for such things as more control over their business; a lower total cost of care; a better member experience and engagement; improved network, rebate and clinical outcomes; and better, more timely analytics, he said.

Insourcing PBM functions gives plans the opportunity to “control more of the data so they can do a better job of leveraging that which they can actually control,” he said. Gonzalez said plans don’t need to bring in all the services at once: “It doesn’t have to be an all-you-can-eat out of the gate.” Companies are offering modular platforms that allow for a selective approach to bringing PBM services inhouse. He also advised health plans to keep control of services like help centers that involve direct contact with members. “Don’t lose that opportunity — you’ve got to build your brand as a health plan,” said Gonzalez

Health plans can start by identifying functions that could be improved by in-sourcing using their own resources or that of another PBM or technology partner, Gonzalez said, and by understanding the technology needed to in-source functions successfully. Among the components that could be insourced are rebate aggregation, the claims adjudication platform; and rebate and formulary management, he added. “What’s really going to matter is improving that overall outcome for the member and improving that consumer experience,” Gonzalez concluded.

Abarca’s Javier Gonzalez discussed the advantage of health plans insourcing PBM services in an à la carte fashion. 

Smaller PBMs and Insourcing Are Finding a Place in a Market Dominated by Major Players 

Despite the job losses spurred by the COVID-19 pandemic, the number of uninsured Americans dropped in 2020 when compared to 2019, according to the 

Centers for Disease Control and Prevention

Last year, 31.6 million people, or 9.7% of the population, had no insurance. In 2019, 33.2 million people, or 10.3% of the population, were uninsured.

Adults between the ages of 18 and 64 were most likely to be uninsured, with almost 14% having no insurance in 2020. That compares to about 5% of children with no insurance, and less than 1% of seniors who were uninsured.

For adults aged 18 to 64, private insurance coverage actually ticked up, from 66.8% in 2019 to 67.5% in 2020. Public coverage remained flat, going from 20.4% in 2019 to 20.5% last year.

But differences in uninsured rates were dramatic between states that have expanded Medicaid and those that have not.

Almost 21% of adults were uninsured in states that failed to expand Medicaid, compared to about 10% of adults in expansion states.

Those in non-expansion states were also less likely to have private health insurance coverage. In expansion states, more than 69% of adults had private insurance, compared to more than 64% in non-expansion states.

About 8.6 million adults obtained private health insurance through the federal or state-run health exchanges set up under the Affordable Care Act.

Differences in insurance coverage were stark when examined by race. Nearly 30% of Hispanic adults and almost 15% of blacks had no insurance. That compares to about 9% of non-Hispanic whites and Asians.

The COVID-19 pandemic has shone a spotlight on racial and ethnic disparities. Blacks and Hispanics are 2.8 times more likely than whites to be hospitalized because of COVID-19, according to the 

. Blacks are twice as likely to die from the virus, and Hispanics are 2.3 times more likely to die.

Social determinants of health such as access to healthcare, socioeconomic status and occupation all can play a role in health outcomes after exposure to COVID-19.

Amount of Uninsured Americans Dropped in 2020 - Despite the Number of Insurance Barriers 

The COVID-19 pandemic is driving up demand for healthcare, and that trend could continue well into the coming years, according to a survey of major U.S. employers.

Almost 95% of those surveyed expect to see increased demand for medical services due to employees deferring care because of the pandemic. More than 90% are concerned about their employees’ long-term mental health because of COVID-19, according to a survey of 136 large employers by the 

At the same time, more than three-quarters expect employees will have an increased need for help managing chronic conditions, and almost 70% expect a higher prevalence of late-stage cancers due to delayed screenings, the 2022 Large Employers’ Health Care Strategy and Plan Design Survey found.

The employers expect healthcare spending will jump about 6% both this year and next. In comparison, there was no overall change in spending last year. Employers reported a range from a 10% increase in spending for 2020, to a 12% decrease, resulting in no change overall.

To combat the mental health challenges caused by the pandemic, three-quarters of those surveyed said providing access to mental health care will be a major area of focus in 2022, and many will focus on addressing the stigma surrounding behavioral health care.

Virtual healthcare has been a major force in providing care for behavioral health issues as well as for addressing physical health concerns during the pandemic, and the use of telehealth is expected to continue next year.

At the same time, employers are expected to put an increasing emphasis on on-site healthcare clinics, which can provide COVID-19 testing and vaccinations, and help employees manage their chronic conditions.

More than 50% of those surveyed had on-site clinics by 2017, but that dropped to 44% with the start of the pandemic in 2020. Now 57% say they will have or are considering having an on-site clinic by 2024.

Almost 95% of U.S. employers surveyed expect to see increased demand for medical services due to employees deferring care because of the pandemic. More than 90% are concerned about their employees’ long-term mental health because of COVID-19, according to a survey of 136 large employers by the Business Group on Health.

Susan Ladika

Articles

Retailers Want to Provide You Healthcare, Not Just Sell you Stuff

Smaller PBMs and Insourcing Are Finding a Place in a Market Dominated by Major Players

Amount of Uninsured Americans Dropped in 2020 - Despite the Number of Insurance Barriers

Healthcare Use is on the Rise and May Stay That Way for the Next Coming Years