Both major pharmacy chains want to offer in-person medical care, but they’re taking somewhat different approaches.
The doctor will see you now.
Telemedicine has changed the game when it comes to how many Americans get some of their medical care. The problem remains that a virtual doctor’s visit can’t solve every problem. Online doctors can’t draw blood, take your blood pressure, test for Covid, or do so many other basic things.
Teladoc (TDOC) – Get Teladoc Health, Inc. Report may have made certain types of healthcare more accessible for millions of Americans, but healthcare still requires in-person visits and both CVS Health (CVS) – Get CVS Health Corporation Report and rival Walgreens (WBA) – Get Walgreens Boots Alliance Inc Report want to fill some of the space that Teladoc and telemedicine can’t.
Walgreens and CVS Adding Clinics, Doctors
Both CVS and Walgreens see a demand for more in-person healthcare at the community level. Both chains have over 9,000 U.S. locations with a presence in most major cities. That makes the two chains very well-located when it comes to offering in-person healthcare services.
CVS has been building out its Minute Clinics — walk-in centers that offer basic medical care for minor healthcare needs and ongoing monitoring among other services, The pharmacy company has paired that with its own telemedicine service, according to CEO Karen Lynch’s comments during her company’s third-quarter earnings call.
Earlier this year, CVS Health launched the first national Virtual Primary Care program. This market-leading solution offers a national network of physicians virtually and access to convenient face-to-face care in our MinuteClinic locations when needed, often with 0 co-pay. Our program has grown to 30 customer accounts with over 750,000 eligible members as of January 1, 2022. This is an indication of our ability to scale nationally and bring innovative products to the marketplace.
Basically, CVS wants to one-up Teladoc by offering both online and in-person solutions. Its customers can walk in for basic medical needs or have an online doctor refer them to a nearby clinic in-person services are needed.
Walgreens has lagged behind its rival when it comes to adding clinics to its stores, but it has stepped up its efforts recently. The company has a variety of different concepts for in-person medical care:
Health Corner: These aren’t walk-in clinics. Instead, Heath Corner offers “a safe, comfortable place for people to ask questions they might hesitate to ask in more formal care settings, in the hope that they can make health-related decisions with more confidence,” according to a press release. Located in a small amount of Walgreens locations, Health Corner allows customers to talk to a Health Advisor.Village MD: Walgreens has invested $5.2 billion in VillageMd, which offers primary care medical services. The company plans to open “at least 600 Village Medical at Walgreens primary care practices in more than 30 U.S. markets by 2025 and 1,000 by 2027, with more than half of those practices in medically underserved communities.” according to a press release. Carecentrix: Walgreens purchased a controlling interest in this company which provides at-home care for post-acute patients. Think everything from “care transitions, home nursing, durable medical equipment, home infusion, and in-home palliative care,” the company explained in a press release.
Both Walgreens and CVS have put multiple oars in the water to try and take a major piece of the in-person healthcare business. Both clearly see the value of having an integrated approach between doctor/care provider and pharmacy.
“Over the past two and a half years, we have worked side-by-side with Walgreens to create an integrated primary care and pharmacy model that accomplishes one primary goal: better patient care. WBA’s investment supports our ongoing commitment to providing the highest quality healthcare to all patients, including many people who don’t currently have convenient access to a primary care provider,” said VillageMD CEO Tim Barry.
Everyone Wants a Piece of the U.S. Healthcare Market
While many Americans agree that healthcare is broken, figuring out how to fix it has been a challenge (and a political minefield). Big technology companies including Amazon (AMZN) – Get Amazon.com, Inc. Report have waded into the space with limited success and Haven, a partnership between Warren Buffett’s Berkshire Hathaway (BRK.A) – Get Berkshire Hathaway Inc. Class A Report, JPMorgan, and Amazon failed.
“We learned a lot about the difficulty of changing around an industry that’s 17% of GDP,” Buffett said, according to Yahoo.. “We were fighting a tapeworm in the American economy, and the tapeworm won.”
It’s the size of the opportunity that makes healthcare such an attractive opportunity, but that size also makes healthcare a very difficult market to disrupt.
“U.S. health care spending grew 9.7% in 2020, reaching $4.1 trillion or $12,530 per person. As a share of the nation’s Gross Domestic Product, health spending accounted for 19.7%,” according to U.S. government data.
