The idea behind this collaboration and other deals involving national pharmacy chains is to better meet the shifting demands of consumers.
The nationwide pharmacy chain Walgreens has struck a deal with McLaren Health Care, based in Grand Blanc, Michigan, to interlock their pharmacy and health service offerings.
The integrated health network will open new care sites within Walgreens stores, and Walgreens will take over on-site McLaren pharmacies, buying up the system's prescription files and pharmacy inventory, the organizations announced Wednesday. Their strategic collaboration is part of each entity's efforts to compete in a rapidly consolidating market by making healthcare delivery more efficient.
"Consumers increasingly seek value and convenience when choosing a health care setting, and fewer—particularly younger adults—have a relationship with a primary care physician," McLaren President and CEO Philip Incarnati said in a statement. "Walgreens has a reputation for delivering outstanding service and customer experience, and we are proud to work with them to create these new clinics and give Michigan residents more options for quality, affordable care when and where they need it."
Walgreens will acquire 14 of McLaren's pharmacies in the deal, and McLaren will open an as-yet-undetermined number of retail clinics, urgent care centers, and primary care sites in Walgreens stores, according to a Walgreens spokesperson. Financial terms have not been disclosed.
The idea behind this collaboration—as has been the theme of other deals involving national pharmacy chains—is to better meet the wants and needs of consumers.
"As the cost of healthcare continues to rise, patients' expectations are evolving around better value, convenience and simplicity, and a desire for instant, high-quality care," Pat Carroll, MD, Walgreens chief medical officer and group vice president of healthcare services and clinical programs, said in the statement.
"Our collaboration with McLaren, demonstrates our ongoing commitment to create neighborhood health destinations that provide retail health services and patient care across the communities we serve," Carroll added.
Where Walgreens Beats CVS
This is far from the first time Walgreens has partnered with local health systems and physician groups to operate cobranded clinics within its retail stores. Walgreens has at least 14 existing partnerships across 10 states. McLaren appears to be the first such partnership in Michigan.
Although CVS Health is the nation's frontrunner in the number of walk-in clinics, Walgreens is leading the pack in terms of cobranded sites, with more than 200 such clinics nationwide, according to Michelle La Vone Richardson, a market analyst with Decision Resources Group in Nashville. These cobranded clinics have risen in popularity in recent years as a tool for integrated delivery networks (IDN) to reduce costs, improve population health management, and keep patients from exiting the system to find lower-acuity care options, she said.
"If health systems can help patients manage their chronic diseases via check-ins with a nurse practitioner at the local Walgreens, as one example, they may be able to trend their cost curve downward and negotiate more competitive rates with insurers hungry for value," Richardson added.
What's more, partnering with a chain like Walgreens brings health systems a step closer to ubiquity, offering easy-to-access care sites with long hours, she said.
Providence St. Joseph Health, based in Renton, Washington, has been collaborating with Walgreens on cobranded clinics for a couple of years now. The arrangement brings the health system's reputation for high-quality care into the pharmacy chain's physical store, and it helps to expand the health system's patient funnel, especially since the clinic uses the system's electronic health records (EHR) system.
"I think it's been mutually beneficial as partners," Providence St. Joseph Health President and CEO Rod Hochman, MD, told HealthLeaders. "We're acquiring new patients, particularly younger, millennial patients coming through there."
Meeting Patients Where They Are
In addition to connecting with younger patients, the Walgreens partnership with McLaren will deliver geographic benefits as well, giving the system more touchpoints with the community, according to Tyler Dinwiddie, a Decision Resources Group senior analyst.
"McLaren is already a fairly advanced IDN, but cooperating with Walgreens will allow the IDN to plant its flag deeper in parts of its service area, which includes far-northern, central, and southeastern Michigan," Dinwiddie said. "So those are the areas where McLaren will benefit the most."
Richardson said this rising popularity of retail clinics is poised to keep going, especially since the individual mandate penalty expires on January 1 and states are implementing Medicaid work requirements, which is likely to drive demand for inexpensive and immediate care. All of that's on top of Walgreens' need to compete with the CVS-Aetna merger.
Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.
Walgreens will acquire 14 of McLaren's pharmacies, and McLaren will open retail clinics in Walgreens stores.
The idea behind this collaboration is to better serve consumers where and how they'd like.
Walgreens had struck similar partnerships on cobranded sites in at least 10 states already.