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Walgreens and Walmart enter the fray

July 10, 2020

Topics: Quote of the Day

By Melissa Repko
CNBC, July 8, 2020

Walgreens Boots Alliance will soon have doctor offices inside of hundreds of its U.S. drugstores.

The pharmacy chain said Wednesday it has struck a deal with VillageMD, which will staff and run the primary-care clinics. The companies said they will open the clinics in 500 to 700 stores in more than 30 U.S. markets over the next five years.

Walgreens will invest $1 billion in equity and convertible debt in VillageMD over the next three years as part of the deal, including a $250 million equity investment completed Wednesday. Most of the money will be used by VillageMD to open the clinics and integrate its technology with Walgreens.

VillageMD will recruit and pay employees’ salaries, cover other operating expenses and pay Walgreens to use the space. Walgreens said it will own about 30% of the primary-care company after the multiyear investment.

The company wants to turn its drugstores into health and wellness destinations where people spend more time and money.

Through the new partnership, patients will be able to visit the Village Medical at Walgreens clinics for a wide range of medical services from annual checkups to walk-in appointments if they feel sick. Each clinic will have nine exam rooms, a waiting area and a four-person physician-led staff that coordinates with store pharmacists. They can also request a home visit or get care around the clock through telemedicine.

Walgreens and VillageMD will face stiff competition. Walmart has opened four primary-care clinics, with plans for more. The big-box giant’s clinics, called Walmart Health, emphasize its signature low costs and upfront pricing. Amazon’s acquisition of online pharmacy PillPack underscores its broader health-care ambitions. And CVS Health, which acquired health insurer Aetna, plans to open 1,500 HealthHUB stores by the end of 2021. The redesigned stores have a variety of health-related features such as expanded clinics, wellness rooms for yoga and more medical-related products.

“We want to be everywhere in America where people need health care,” (Walgreens co-Chief Operating Officer Alex Gourlay said). “That’s always been our position and always will be.”

https://www.cnbc.com…


Walmart quietly registers insurance business in its latest move into health care

By Melissa Repko
CNBC, July 8, 2020

Walmart is making yet another move in the health-care world: It’s getting into the insurance business.

The Bentonville, Arkansas-based retailer confirmed to CNBC on Wednesday that it will start selling health insurance plans. It has job openings listed on its careers website for “Walmart Insurance Services LLC.” In the job posts, it says it’s looking to hire insurance agents in the Dallas area to sell supplemental Medicare insurance.

Walmart currently provides insurance information at Walmart Health, its primary clinic locations, and has an education program called Healthcare Begins Here that helps people find an insurance policy.

The big-box retailer has opened primary-care clinics, made health-care acquisitions and spoken about its broader ambitions. It previously teamed up with insurer Humana to offer a Walmart-branded Medicare prescription drug plan, but this marks the first time the retailer is setting up as an insurance broker.

The retailer has opened four Walmart Health clinics in the U.S., with plans for more. The clinics offer a wide range of low-cost services, such as an annual checkup for $30 or a strep test for $20.

https://www.cnbc.com…


Comment:

By Don McCanne, M.D.

Our health care financing system is highly inequitable. In spite of being the most expensive health care system, we fall behind most other wealthy nations in leaving too many individuals uninsured or underinsured, with impaired access to care. We’ve been trying to fix that by advocating for single payer Medicare for All. But, as we have been directing our attention to health care financing, what has been happening with the health care delivery system?

Well, horizontal and vertical consolidation has changed the market dynamics in health care. The private insurance companies and the benefit managers have been moving in and becoming an integral part of the health care delivery system. The expansion of control by the medical-industrial complex has changed the nature of traditional relationships between patients and their health care professionals. Today’s articles on Walgreens and Walmart provide examples of how control of health care is shifting away from the health care professionals and institutions and more towards the investment community.

This is serious. How is a single payer Medicare for All program going to be able to manage making appropriate payments to the health care delivery system when it has become part of an amalgamation with other business interests, many of which we have been trying to remove from health care financing if for no other reason than their profound administrative waste?

Earlier this week we discussed the importance of planning in health care. Adam Gaffney stated, “We need a health system where the distribution of infrastructure and resources is not left to the dictates of the market, but rationally planned according to the needs of communities.”

In the future, when you are taken by ambulance to a hospital emergency department, after they ask you for your insurance card, instead of asking who your physician is, will they be asking, “Are your medical records at Walgreens or Walmart?” That might please the advocates of market competition, but it shouldn’t be about markets. It should be about patient service.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

About the Commentator, Don McCanne

Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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