Consumers are embracing pharmacy expansion into primary care, says J.D. Power

Nurse putting blood pressure cuff on older woman's arm at a CVS MinuteClinic
CVS Health is on track to create 1,500 health hubs in its stores across the U.S. by 2021. It has also launched more than 1,800 test sites at drive-thru locations and launched "Return Ready," a business-to-business testing program, in response to the COVID pandemic. (CVS Health)

Turns out, consumers like all the new health service options popping up at national retail pharmacy locations.

According to the J.D. Power 2020 U.S. Pharmacy study, the expansion of pharmacy companies into the primary care realm has driven "significant increases in both satisfaction and consumer spending."

In recent years, pharmacy giants like CVS Health have aggressively expanded into the health delivery space as they pursued insurance partnerships.

CVS acquired Aetna in a $69 billion deal and has been investing in transitioning retail locations into HealthHubs which dedicate more than 20% of their retail space to delivering health services. CVS says it's on track to create 1,500 health hubs in its stores across the U.S. by 2021. It has also launched more than 1,800 test sites at drive-thru locations and built "Return Ready," a business-to-business testing program, in response to the COVID pandemic. 

Meanwhile, in 2018, Walgreens Boots Alliance retail operations announced a partnership with insurance company Humana for seniors and, in July, Walgreens announced it will expand its reach into primary care with plans to open 500 to 700 clinics in the next five years in partnership with VillageMD.

Last year, Walmart began creating its own Walmart Health clinics, aimed at serving as one-stop-shops for healthcare attached to retail stores but offering its own entrance and transparent pricing.

RELATED: CVS Health's Merlo touts 'acceleration' in company's healthcare delivery model as profits soar

“When you look at the major pharmacy business trends of the past couple of years—CVS acquiring Aetna, Walgreens partnering with Humana and Walmart moving into health insurance—it’s clear that pharmacy operators are positioning themselves to become hubs of consumer healthcare, edging into the space once reserved for primary care physicians’ offices,” said James Beem, managing director of healthcare intelligence at J.D. Power, in a statement. 

“What has not been clear until now is exactly how consumers would react to the shift. Simply put, they’re embracing it, and it’s driving higher overall satisfaction and increased spending as they use more health and wellness-oriented services," he said.

J.D. Power's study also found nearly half (48%) of retail pharmacy customers used at least one health and wellness-oriented service provided by their pharmacy this year, up five percentage points from the company's study results in 2019.

Customer satisfaction with retail pharmacies has jumped 26 points higher on a 1,000-point scale among those customers who use health and wellness services. The study also found those customers that use their pharmacy's health and wellness-oriented services spend an average of $35 per customer than the $24 per customer among those who do not use those services. When customers use two or more of those services, their average spending jumps to $58 per customer. 

RELATED: Walgreens plans to open up to 700 primary care clinics as part of $1B investment in VillageMD

The survey indicated utilization of digital ordering remains low with fewer than one in 10 pharmacy customers who use the brick-and-mortar pharmacy location order their prescriptions through digital channels. For customers who do order digitally, customer satisfaction is five points higher than it is among those who visit the store in-person. 

Fewer than one in 10 pharmacy customers indicating they've received a recommendation from their doctor or a trusted loved one to use pharmacy-delivered health and wellness services. However, recommendations from doctors were associated with an 80% utilization rate while recommendations from friends and family are associated with a 75% utilization rate. The most common means of hearing about these services is in-store advertising, which drives a 45% utilization rate.

So who ranked tops? 

According to the study, when it came to the highest ranked brick-and-mortar chain drug store pharmacies, Good Neighbor Pharmacy took the crown for the fourth consecutive year followed by Health Mart and Rite Aid Pharmacy. Meanwhile, when it came to brick-and-more mass merchandiser pharmacies, Sam’s Club came in first for the fifth consecutive year, followed by Costco and CVS/pharmacy inside Target.

When it came to brick-and-mortar supermarket pharmacies, Wegmans took the gold, followed by Publix and Winn-Dixie.

Finally, Humana Pharmacy came in first in the mail order segment for a third consecutive year, followed by OptumRx and Kaiser Permanente Pharmacy.

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