The drugstore chain’s partnership with Microsoft is designed to close existing gaps in care in the traditional healthcare system, says Walgreens.
News that Walgreens Boots Alliance has formed a strategic partnership with Microsoft is more bad news for hospitals that a drugstore chain with more than 9,500 U.S. locations is looking for even more ways to keep the patient inside the drugstore.
Certainly, hospitals and health systems have their own information systems and partners like Cerner and Epic helping them with interoperability and communicating with other providers to make sure the care is being given in the right place, in the right amount, and at the right time.
But Walgreens says its partnership with Microsoft is more than improving the exchange of health information and is designed to also close existing gaps in care in the traditional healthcare system. Walgreens executives say they want to make sure the patient is tied into an “ecosystem” of low-cost, quality providers and the growing menu of services offered by the retail pharmacy chain.
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“Our strategic partnership with Microsoft demonstrates our strong commitment to creating integrated, next-generation, digitally enabled healthcare delivery solutions for our customers, transforming our stores into modern neighborhood health destinations and expanding customer offerings,” Stefano Pessina executive vice chairman and CEO of Walgreens Boots Alliance said in an announcing the deal.
This means Walgreens is adding even more services and technology to play a greater role in communities long dominated by hospitals and health systems, analysts say. The Microsoft relationship builds on alliances Walgreens is already forming with other providers like its relationship with Humana to put senior health clinics inside its drugstores.
“Retail pharmacies offer an opportunity to engage with the patient much more frequently than at an office visit,” says Forrester senior healthcare analyst Arielle Trzcinski.
“Chronic care patients see their pharmacist frequently,” Trzcinski says. “I’ve seen figures that indicate the average diabetic patient sees their provider once every six months. This gap creates an opportunity for the pharmacist to help monitor the patient’s health and prompt the patient to receive preventative care in the retail clinic or through a virtual care visit.”
The Walgreens-Microsoft partnership is also designed to push on-site and virtual care offerings that are less expensive to the individual than hospital care. The companies aren’t yet disclosing specifics, but say they want “to develop new health care delivery models, technology, and retail innovations to advance and improve the future of healthcare.”
Retailers push forward onto traditional healthcare turf
Walgreens said it will roll out a pilot program that includes 12 in-store “digital health corners” that will sell healthcare-related devices and products. The companies are also discussing whether to establish joint innovation centers in yet-to-be-disclosed markets.
With the help of Microsoft’s Azure cloud and artificial intelligence platform, Microsoft CEO Satya Nadella said the two companies want to put “people at the center of their health and wellness.”
One key goal of the partnership is to avoid the hospital and health system by getting more outpatient care and wellness services to consumers upfront, Microsoft and Walgreens said in announcing the partnership. “The companies will proactively engage their patients to improve medication adherence, reduce emergency room visits, and decrease hospital readmissions,” Walgreens and Microsoft said.
The Walgreens-Microsoft alliance comes as retailers are already pushing deeper into healthcare, and therefore on the turf long dominated by hospitals and health systems. Amazon’s purchase last year of the online pharmacy PillPack and drugstore chain CVS Health’s purchase of the health insurer Aetna are two examples of the retail push by larger players to add more healthcare services and benefits.
These retailers are already gaining more attention from employers, insurers, and others picking up the tab for healthcare. Such retail healthcare services either didn’t exist before or are now reasons to avoid a traditional provider like a hospital, health system, or doctor practice, analysts say.
In the Kaiser Family Foundation 2018 Employer Health Benefits Survey, among all employers with 50 or more workers, 68% of respondents say they offer benefits that “cover healthcare services received in retail clinics, such as those located in pharmacies, supermarkets, and retail stores in their largest health plan.” Within that same group of employers, 15% of respondents say they provide a “financial incentive” for their workers to use a retail clinic instead of a visit to a doctor’s office, the Kaiser employer health benefits survey said.
Retail to cause potential hospital closings?
Stronger retail drugstores could create competition with hospitals and could even fuel closures of underperforming healthcare facilities, particularly hospitals in rural areas, analysts say. Hospitals have already been closing at a rate of about 30 each year, according to statistics from the American Hospital Association.
“The risk of facility closures coupled with changing consumer expectations will only further support this,” Forrester’s Trzcinski said. “Consumers will turn to retail locations like Walgreens, Walmart, and CVS for convenient care options as well as virtual care delivery to fill the gap.”
Date: January 28, 2019