Integrated health care company is aim for WBA

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DEERFIELD, Ill. — Walgreens Boots Alliance (WBA) unveiled an ambitious plan to reinvent itself as an integrated health care company.

A clearer focus on health care will serve as the drug store chain’s “new growth engine,” chief executive officer Roz Brewer said last month in introducing the plan.

“The pandemic further affirmed the timing is right for this new phase of our company,” Brewer said. “Consumers are embracing retail pharmacies to manage their health more than ever.”

Central to the plan is a new business segment, Walgreens Health, which will advance WBA’s capabilities in the provision of primary care, post-acute care and home care services.

Walgreens Health will build on its majority stake in VillageMD, a Chicago-based provider of primary care. The investment should help WBA accelerate the rollout of Village Medical clinics; WBA aims to have the clinics, under the name Village Medical at Walgreens, in 1,000 stores by 2027, with half located in medically underserved communities.

Walgreens said it will have 85 primary care clinics in stores by the end of the year and at least 600 of them in more than 30 U.S. markets by 2025.

The new Walgreens Health business will also capitalize on WBA’s majority investment in Care­Centrix, a Connecticut-based company that coordinates home care and post-acute care for patients, and helps provide value-based care on behalf of health plans and providers.

Walgreens said the U.S. post-acute care market accounts for $75 billion in annual spending and is one of the fastest-growing segments in health care. CareCentrix manages care for more than 19 million members through 7,400 provider locations.

In addition to investments in VillageMD and CareCentrix, the drug store chain has introduced Walgreens Health Corners, which provide in-person and virtual clinical and nonclinical services from licensed health advisers.

Other recent moves include a partnership with Clover Health to begin serving its members, and a partnership with Blue Shield of California to launch new products and services to its members.

The WBA leadership team shared details of its new strategic priorities to deliver advantaged growth in community health care, including:

• Transform and align the core by building the pharmacy of the future. Support and enable the health care strategy by reimagining retail through expanded health and wellness offerings and mass personalization while also accelerating WBA brands and digital offerings. Expand the Transformational Cost Management program.

• Build the next growth engine with consumer-centric health care solutions by accelerating the path to becoming a leading provider of local clinical care services. Leverage a consumer-centric technology and pharmacy network to deliver and enable others to deliver value-based care. And strengthen partnerships with payers, providers and patients.

• Focus the portfolio and optimize capital allocation. Prioritize core assets and health care ambitions and maintain the commitment to return cash to investors.

• Build a high-performance culture and a winning team by attracting and retaining a best-in-class, diverse team.

Walgreens said traffic to its stores picked up in the fourth quarter as people came in for COVID-19 vaccinations. For fiscal 2021, net cash provided by operating activities was $5.6 billion, up $70 million from a year earlier. Walgreens said it gave 34.6 million COVID-19 vaccinations in the fiscal year.



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