Walgreens, VillageMD partner to open primary care clinics in Houston stores

Walgreens is opening a series of primary care doctors' offices in some of its Texas retail locations, part of a shift toward a changing healthcare delivery model the pharmacy retail giant has previously announced.

Walgreens is partnering with VillageMD, a national provider of primary care based in Chicago, to open five new 2,500-square-foot primary care clinics next to Walgreens stores in the Houston area, with plans to possibly expand there and in other markets.

The first locations are scheduled to open by the end of 2019, according to a joint announcement Wednesday.

The two companies plan to continue to explore an expansion of what they are branding as “Village Medical at Walgreens” in Houston and other markets. The companies did not disclose financial terms of the agreement.

According to CNBC, the primary care clinics will have a separate storefront and a door connecting the two spaces. Walgreens will shrink the stores’ retail space to make room for the offices. The locations will include six to eight exam rooms as well as a waiting area and will offer traditional primary care services like annual physical exams, CNBC reported.

Walgreens has been aggressively working to establish itself as a force in the consumer health market, fighting back rivals like CVS Health, which acquired Aetna for $69 billion and has been rapidly expanding its influence in transforming healthcare delivery.

In January, Walgreens announced a partnership with Microsoft to develop new healthcare delivery models by combining Microsoft Azure—the tech giant's cloud and AI platform—with Walgreens' outpatient healthcare and retail footprint. Working with Microsoft, Walgreens plans to pilot up to 12 store-in-store "digital health corners" to sell certain healthcare-related hardware and devices. 

The retail pharmacy company also is working with Verily, Alphabet Inc.’s life sciences research arm, to use technology to help patients with diabetes and medication management.

In addition, Walgreens also has formed partnerships to bring more health services to its stores, such as lab testing services with LabCorp.

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Blue Cross and Blue Shield of Texas also announced earlier this week it is partnering with Sanitas USA to open 10 primary care centers in Dallas and Houston. The centers will offer primary care, urgent care, lab and diagnostic imaging services, care coordination and wellness and disease management programs, all under one roof. The centers will open for patient appointments beginning January 1, 2020.

Both moves come as retailers and health insurance companies form closer ties with healthcare providers.

CVS Health opened the first of a series of concept stores in February in the Houston market as a testing ground for a consumer-central retail engagement model that can focus on managing chronic illnesses, extending primary care and reducing avoidable hospital admissions.

Both Walgreens and CVS are exploring ways to add health services to their stores such as testing on-site dental and cosmetic dentistry services.

The collaboration by Walgreens and VillageMD will focus on providing adult patients in the Houston area with what the companies said will be a transformative primary care experience in state-of-the-art clinics. The clinics will provide comprehensive primary care services integrated with Walgreens’ pharmacists, nurses and social workers to meet patient needs, including those of seniors, the announcement said.

“This collaboration with VillageMD demonstrates our ongoing commitment to create neighborhood health destinations that bring affordable health care services to customers and provide a differentiated patient experience to the communities we serve,” said Pat Carroll, M.D., Walgreens chief medical officer and group vice president, healthcare services and clinical programs, in a statement.

VillageMD works with physician groups, independent practice associations and health systems looking to move toward a primary care-led, high-value clinical model. It provides tools, technology, operations and staffing support for physicians to achieve clinical results while lowering costs. It now includes more than 2,500 physicians in eight markets and is responsible for approximately 500,000 patients and $2.8 billion in healthcare spending.

A key part of the collaboration is VillageMD’s patent-pending data integration docOS system, released last April, according to the two companies. The system, which integrates data and technology, can help identify missing diagnoses and gaps in health, allowing doctors and patients to better manage chronic conditions, the companies said. 

"VillageMD has a strong track record nationally of improving outcomes and reducing the cost of healthcare through their transformative primary care model. With more than 120 primary care physicians in their medical group in Houston, we look forward to working with them as we focus on the health and well-being of the community,” Carroll said.

“The integration of primary care and pharmacy is yet another example of the value-based commitment that Walgreens and VillageMD demonstrate to customers, patients, and the broader healthcare landscape,” said Tim Barry, CEO of VillageMD.

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The Blue Cross Blue Shield Texas/Sanitas partnership will follow a similar timeline, offering services for BCBS cardholders, along with self-pay and traditional Medicare patients. Some locations will be open 365 days a year, and every location will have extended weekday and weekend hours.

The Texas deal was part of a joint venture between Health Care Service Corp., the parent of five Blue Cross Blue Shield plans, and Sanitas USA to open primary care centers not only in Texas but in four other states, according to a Forbes report. The Texas clinics are the precursor to a U.S. multistate rollout, that report said.

The companies will evaluate future expansion in not only Texas but in Illinois, Oklahoma, New Mexico and Montana, where Health Care Service Corp. owns Blues' plans. Health Care Service is the country’s fourth-largest health insurance company, and Sanitas is a multination healthcare company that has partnered with other health insurers in the U.S.