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

MHE PublicationMHE September 2021
Volume 31
Issue 9

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

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 Insider. 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.”

Minute to hub

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 Managed Healthcare Executive.® 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 partners up

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 MHE. 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 adds telehealth

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.

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

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