Walgreens Boots Alliance says its joint venture with Humana to develop senior health clinics has to “standalone and make a profit by itself” to be successful in the long-term.
Speaking at the JPMorgan Healthcare conference Monday, Walgreens executives continue to be optimistic on 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.
It could take up to two years before the joint venture would be a financial success. “We are definitely not providing guidance,” Walgreens executive vice president and global chief financial officer James Kehoe said Monday afternoon via webcast from the JPMorgan conference.
“It has to standalone and make a profit by itself and it’s not being cross subsidized with our businesses,” Kehoe said. “And on top of that we get benefits within the business.”
But there are ways Walgreens and Humana benefit financially right away, executives said. For example, Walgreens can make money from prescriptions from patients who enter the store for care at the Humana clinics as well as potential retail purchases they might make. “You have to take on the patients,” Kehoe said.
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.”
“We’re learning that the patients and the customers in these communities enjoy having a pharmacy and GPs and other healthcare professionals together,” Walgreens co-chief operating officer Alex Gourlay said at JPMorgan. “And the evidence is that they’re using the services. Over a period of time we can take better care to people and communities and they can take costs of the healthcare system, which of course is what we’re trying to do in this partnership overall.”
Date: January 10, 2019