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What’s New?

McLaren will offer services ranging from retail health clinics to urgent care centers and primary care sites in select Walgreens stores. Also, Walgreens will buy the prescription files and pharmacy inventory assets of McLaren pharmacies in Michigan and certain on-site pharmacies operated by the health system. That will enable McLaren Pharmacy patients and McLaren Health Plan members, including the health system’s employees, to access Walgreens prescription services at any McLaren or Walgreens location.

What’s Going On?

This deal is the latest example of partnerships among large retailers and providers that will enable them to make care delivery more convenient, accessible and affordable. In another example, Shoppers can receive nonurgent medical care from BayCare physicians through teleconferencing and diagnostic equipment housed in kiosks at the pharmacy.

Partnerships like these enable hospitals and health systems to serve patients where it’s most convenient for the consumer without incurring significant investments to acquire or build facilities. The deals also enable huge retailers to expand their footprints in health care and enhance their value to consumers. This latter issue is of growing significance as retailers like Walgreens, CVS, Walmart and others move aggressively to build stronger margins through increased pharmacy sales and services by establishing health clinics in their facilities. Walmart has installed health checkup kiosks in thousands of its store and medical clinics in a handful of others. Marcus Osborne, Walmart VP of health and wellness transformation, says Industry analysts argue these moves are designed to help retailers reshape their business strategy as sales and margins on non-pharmacy product lines soften due to greater market competition.

And retailers are aligning with another willing partner — payers. By expanding into direct ambulatory care services, retailers and insurers can build their businesses beyond traditional lines of service. As HealthLeaders recently noted, to concentrate more on leveraging relationships with Aetna’s patients who fill their prescriptions at CVS stores. Walgreens is following suit, looking to provide more physician services such as X-rays and procedures by partnering with UnitedHealth Group’s Optum to connect its MedExpress urgent care centers to adjacent Walgreens stores. In addition, while the insurer is working with Walmart on a primary care partnership. Walgreens also recently announced that

These more expansive ventures are what Ken Kaufman, managing director and chair of Kaufman, Hall & Associates, calls an attempt by retailers and some payers to “loosen the bolts connecting hospitals with their outpatient services.”

4 Questions to Answer

As Kaufman has emphasized in many of his talks this year about disruption in health care, these new marketplace realities Here are four he poses to consider:

1. How will we achieve a broad and strong market footprint large enough to advance our organization?
2. How will we compete for limited assets and talent?
3. How will we gain access to a different level of intellectual capital?
4. How will we enhance our cash flow and access to capital?