Walgreens Boots Alliance seems more convinced every day that its partnership with Humana developing senior health clinics is critical to the drugstore chain’s future growth as a medical care provider in the U.S.
Walgreens executives continue to praise the early results of a joint venture with Humana developing senior health clinics in the Kansas City market where a pilot of two sites inside drugstores has been underway for about six months.
The effort is designed in part to keep people out of the more expensive hospital setting and make sure Medicare patients have their care more closely monitored by Walgreens pharmacists and physicians in Humana’s health plan networks. The two companies think they can do a better job of reaching patients who visit Walgreens retail locations and making sure they get better care upfront before they get sick.
“We still need to validate the business model and the economics of the clinics, but patient response has been very promising and I believe it has a good chance that this may provide a template for primary care in many of our stores,” Walgreens co-chief operating officer Alex Gourlay told analysts last week on the company’s fiscal 2019 first quarter earnings call.
The Humana senior clinic partnership is part of Walgreens response to rival drugstore chain CVS Health’s acquisition of Aetna, the nation’s third-largest health insurance company. The senior clinics Walgreens is developing with Humana are designed to complement the prescriptions and pharmacy services offered at Walgreens with Humana’s “Partners in Primary Care” centers that opened last year in Kansas City.
Inside the Walgreens, Humana employees assist seniors in the insurer’s Medicare plans and other “other customers, with information and assistance in accessing a range of health-related services,” the companies said when they launched the partnership six months ago. “From conducting diabetes education to identifying local community support groups and finding a new senior fitness class, a holistic approach to customers’ health will be available at no cost, and close to home.”
It’s still too early to know how the partnership will boost Walgreens bottom line, analysts say.
“(Walgreens) does not provide a lot of detail on the financial impact of these partnerships and healthcare
JVs are difficult to model,” Mizuho Securities analyst Ann Hynes said last week in a report. “In the near-term, we expect no meaningful EPS contribution.”
But the positive words by Gourlay and other Walgreens executives comes less than a month after Walgreens CEO told attendees at the Forbes Healthcare Summit that the customer response has been good. It’s an indication an expansion of the Humana partnership could be coming soon.
“If the concept works, we intend to expand that concept,” Pessina said during an interview at the Forbes Healthcare Summit in New York Nov. 28. At that time, Pessina said Walgreens and Humana are evaluating whether expansion will occur through a “joint venture, a commercial agreement” or another form of partnership.
“I am very curious to see what will happen and how these tests will work,” Pessina said at the Forbes Healthcare Summit. “The first reactions of people have been very, very good.”
Date: December 27, 2018