VillageMD, Walgreens to Open 40 Primary Care Clinics in 2021

December 09, 2020 - Walgreens Boots Alliance and VillageMD recently announced plans to open 40 new full-service primary care clinics next year.

The clinics will be operating in major metropolitan areas in the Southwest, including Houston, El Paso and Austin, Texas, Phoenix, Arizona, and Orlando, Florida. The first locations will be outside of Houston and in the Phoenix area starting as early next week.

Walgreens Boots Alliance and VillageMD expect all of the primary care clinics to be open by the end of summer 2021.

“Walgreens is proud to partner with VillageMD to offer the most comprehensive and large-scale roll out of physician-led primary care services co-located in a retail pharmacy setting,” Alex Gourlay co-chief operating officer of Walgreens Boots Alliance, said in an announcement. “Our role as part of patient care teams has never been more critical, and our partnership with VillageMD enables us to provide more people with convenient access to high-quality, affordable care embedded in their communities.”

Walgreens Boots Alliance and VillageMD have plans to open up to 700 of the primary care clinics, which they call Village Medical, over the next five years.

Village Medical will integrate with pharmacists at Walgreens locations to deliver “a full suite of primary care and pharmacy services” in more convenient locations, including outside the clinics via telehealth services, the companies stated.

The clinics will also be physician-led and accept a wide range of health plan options to ensure patients can access cost-effective and comprehensive primary care services.

“In today’s complex healthcare environment, this integrated model of care is more important than ever. When patients adhere to the appropriate care and medication regime, health outcomes improve,” said Tim Barry, chairman and CEO at VillageMD. “At Village Medical at Walgreens, our experienced physicians and providers work closely with Walgreens pharmacists every day to ensure patients get accessible, personalized and coordinated care when they need it.”

Walgreens Boots Alliance is investing $1 billion in equity and convertible debt in VillageMD over the next three years, the company announced earlier this year.

A majority of the investment – 80 percent – is designated for the opening of the clinics, including integrating with Walgreens digital assets. In turn, Walgreens Boots Alliance will hold about 30 percent ownership interest in VillageMD by the end of the three-year period.

VillageMD anticipates the deal with the major retail and pharmacy provider to boost access to primary care services, especially in areas facing a shortage of healthcare professionals.

The provider has previously stated that over half of the clinic locations will be in Health Professional Shortage Areas and Medically Underserved Areas, according to HHS definitions.

But the clinics will also touch on an emerging patient demand – more convenient, cost-effective care options.

A 2018 survey conducted by the Health Research Institute at PricewaterhouseCoopers found that most consumers are generally comfortable receiving routine care at alternative settings beyond the traditional hospital or doctor’s office, but only if costs are lower.

Researchers said this demand is leading to a surge in health retail clinics even though traditional reimbursement is a challenge. The clinics succeed by being a “one-stop-shop” for health and retail consumer needs, they explained.

Other retail pharmacy providers are aggressively expanding their healthcare services. For example, CVS Health is expecting to open over 1,000 of their so-called HealthHUBS in stores across the country by the end of next year. The HealthHUBS will cater to more commonplace health needs, like chronic disease management, while CVS MinuteClinics will continue to address low-acuity services, including immunizations.

Amazon also recently announced the launch of new health centers in partnership with Crossover Health. The centers will provide “full-spectrum” care to employees, including acute, chronic, and preventive primary care, in addition to prescription medications and vaccinations.

However, this market disruption has challenged the established primary care business model.

Primary care practices have increasingly partnered with retail health clinics to extend their reach into the community and meet evolving patient demands for more convenient care. But practices have faced issues getting reimbursed for the services delivered in partnering retail clinics and for the integration needed to make the partnerships successful.