Walgreens Boots Alliance is planning to open 500 to 700 clinics at Walgreens sites in 30 U.S. markets over the next five years.
The company said it will enact the plan in partnership with VillageMD, a Chicago-based primary care provider. The clinics will include doctors on staff.
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“It became clear that you have to have a primary care doctor as part of the model both physically and digitally," Walgreens co-Chief Operating Officer Alexander Gourlay told the Wall Street Journal.
The rollout follows a trial of five in-store clinics in the Houston market that Walgreens says was successful.
The clinics will offer various in-person care physician services, as well as care via telehealth and at-home visits. More than 50% of the new clinics will be in health professional shortage areas and medically underserved areas/populations, as designated by the U.S. Department of Health and Human Services, according to VillageMD.
Walgreens is paying VillageMD $1B in equity and convertible debt over the next three years, after which Walgreens will own a 30% stake in the company. About 80% of the $1B investment will be used by VillageMD to open the 3.3K SF clinics, including the recruitment of doctors to staff them, their salaries and other operating expenses.
The move by Walgreens comes as the company is closing locations and experimenting with other sources of revenue, such as leasing space to weight loss specialist Jenny Craig and eye care company For Eyes, CNBC reports.
Separately, Walgreens has kicked off a pilot program involving small-format stores that focus on healthcare goods. About 30 of the smaller stores will be tested as part of the program.
Other major retailers including CVS and Walmart are likewise ramping up healthcare services at their stores, and insurers and hospital systems have been expanding neighborhood clinics, including the repurposing of empty retail locations.
CVS Health, which acquired insurance company Aetna in 2018, plans to open 1,500 HealthHub Stores. Its model is different from Walgreens' planned expansion, in that the locations won't be staffed with physicians.
Patient demand is driving a lot of the change, Cook County Health & Hospitals System Chair of Medicine Suja Mathew told Bisnow.
"The trend towards healthcare that's more convenient and accessible will absolutely continue, because the people we care for demand it from us," she said.
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