the health strategist
institute for strategic health transformation
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Joaquim Cardoso MSc.
Chief Research and Strategy Officer (CRSO),
Chief Editor and Senior Advisor
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Walgreens is implementing a cost-saving strategy by closing approximately 60 VillageMD clinics, which will help the company cut costs by at least $1 billion in 2024.
In late 2021, Walgreens invested $5.2 billion in VillageMD, increasing its ownership stake in the company from 30% to 63%.
This decision is part of their efforts to enhance VillageMD’s growth and value by focusing on high-opportunity markets and digital integration.
Additionally, the company is taking other measures to reduce costs, such as reducing retail inventory and addressing slow-moving product categories.
Walgreens’ reported disappointing fourth-quarter performance and their expectations for adjusted earnings per share and revenue for fiscal 2024, which are below Street estimates due to various factors, including lower COVID-related sales and a higher tax rate.
Walgreens plans to close some 60 VillageMd clinics
ChainStorage
Marianne Wilson
Editor-in-Chief
October 13, 2023
Walgreens Boots Alliance is looking to cut at least $1 billion in costs in 2024.
As part of its cost-saving strategy, the pharmacy giant and health care services company plans to close approximately 60 VIllageMD clinics, exiting five markets, executives said on the company’s fouth-quarter earnings call. The sites are at or adjacent to Walgreens stores.
In late 2021, Walgreens invested $5.2 billion in VillageMD, increasing its ownership stake in the company from 30% to 63%.
“We believe that we can best enhance VillageMD growth and value by focusing on increased density in our highest opportunity markets and expanding integration of our digital assets,” John Driscoll, president, U.S. Healthcare, told analysts on the call.
“As we exit these nonstrategic markets, our long-term focus will be on achieving density in those regions with the greatest potential to drive future profitability growth and where we can best serve patients with our consolidated set of assets.”
In other moves, Walgreens is reducing SKUs and addressing slow-moving product categories.
“There is significant opportunity to reduce retail inventory and optimize our retail product mix,” interim CEO Ginger Graham said on the call. Graham will turn over the reins to incoming CEO Tim Wentworth on Oct. 23.
Graham added that Walgreens is reducing is capital expenditures in fiscal year 2024 compared to last year, down approximately $600 million.
Walgreens is reducing costs on the heels of a disappointing fourth quarter. The company reported a loss of $180 million, or $0.21 a share, for the quarter (ended Aug. 31), down from $415 million in the year-ago period.
For fiscal 2024, Walgreens expects adjusted earnings per share of $3.20 to $3.50, below Street estimates of $3.71. It expects revenue of $141 billion to $145 billion. Analysts were expecting sales of more than $144 billion.
The company said it expects continuing lower COVID-related sales and a higher tax rate among other things to offset profit growth.
Originally published at https://chainstoreage.com.
Names mentioned
John Driscoll, president, U.S. Healthcare, told analysts on the call.
CEO Ginger Graham said on the call.
Originally published at https://chainstoreage.com.
Names mentioned
John Driscoll, president, U.S. Healthcare, told analysts on the call.
CEO Ginger Graham said on the call.
Note from the Editor
On february 17, 2022, HealthcareDive reported in the article “Walgreens, VillageMD on track to open 200 co-branded clinics this year”,
Dive Brief:
- Pharmacy giant Walgreens and value-based medical network VillageMD are on pace to open more than 200 co-branded primary care practices by the end of the year.
- On Wednesday, the companies opened their first clinic in a new Florida market, Jacksonville, bringing their total markets in the state up to three, including Orlando and Tampa.
- Walgreens and VillageMD plan to open five new Village Medical at Walgreens primary care practices in total in the Jacksonville area through this summer.
- With the Jacksonville openings, Walgreens and VillageMD have now opened more than 80 primary care practices across 12 markets in Arizona, Florida, Texas, Kentucky and Indiana.
Dive Insight:
There’s a race afoot among drugstore chains to build out nationwide medical clinics, as consumers increasingly look for low-cost, convenient care options close to the home after two years of the COVID-19 pandemic.
Players like CVS Health, Walmart and Walgreens have funneled billions into these primary care initiatives in a bid to operate the next go-to neighborhood health destination for the American public and bring in the revenue it provides.
Walgreens’ partnership with VillageMD started roughly three years ago, with a trial of five practices in the Houston area. The retailer announced plans to take the co-branded clinics nationwide in 2020, before accelerating its investment in January of last year.
Walgreens then doubled its ownership stake in VillageMD in October, pledging additional investment of $5.2 billion. At the time, the companies said the cash would accelerate the opening of 600 Village Medical at Walgreens primary care practices in more than 30 U.S. markets by 2025, and 1,000 by 2027 — benchmarks that the companies are still on track to meet, a spokesperson told Healthcare Dive on Thursday.
VillageMD doesn’t have an exact count of the patients served at Village Medical at Walgreens locations, but VillageMD is responsible for 1.6 million patients overall, the spokesperson said.
More than half of the co-branded clinics will be in underserved areas, according to the companies. Primary care initiatives often zero in on regions with high incidence of chronic conditions, like Texas and Florida. In Florida, where the new sites are opening, the number of people with three or more chronic health conditions continues to increase, from 2.4 million people in 2015 to a projected 6.2 million people by 2030, according to the Partnership to Fight Chronic Disease.
Nine-year-old VillageMD, which operates more than 200 clinics across 15 markets, has a coordinated care model using a tech-enabled platform and physician-led care teams including doctors and pharmacists to manage patient care.
The private company has grown rapidly, increasing revenues from $217 million in 2017 to $1.3 billion expected in 2021. The spokesperson declined to share VillageMD’s exact revenue last year, but did confirm that the Chicago-based company still plans to conduct an IPO this year, barring “any unusual or unexpected circumstances.”
VillageMD announced Tuesday it had acquired patient education company Healthy Interactions for an undisclosed amount, in a bid to strengthen patients’ relationships with their providers in chronic care management and boost medication adherence, while reducing overall costs.
Village Medical and Village Medical at Walgreens providers plan to offer the program in 14 markets by the end of this year.
Walgreens has been going down the partnership route to build out clinics. Such relationships can be beneficial for primary care networks, as they can lean on the heft and coffers of deep-pocketed operators with nationwide scale. It’s especially useful for senior-focused clinical companies like VillageMD and Oak Street Health as they scramble to increase their offerings to capture a bigger chunk of the senior population.
Walmart has partnered with primary care startup Oak Street Health to bring its value-based clinics to Walmart supercenters in the Dallas-Fort Worth area, as the retailer continues to expand its network of massive “health superstores” in underserved regions.
CVS Health, however, is going at it alone. The drugstore giant is currently undergoing a massive revamp of its stores, including the opening of new primary care locations that include on-site doctors and enhanced health-focused HealthHUB locations, and has a leg up already when it comes to the reach of its existing network.
Currently, CVS reaches 45% of the U.S. population with its HealthHUBs and MinuteClinics, urgent care locations staffed by nurse practitioners, and plans to open a few hundred additional primary care centers, CVS EVP Alan Lotvin said at the company’s investor day in December.
The addition of doctors to CVS’ primary care locations cancels out what used to be a key differentiator for Walgreens, which has previously stressed how it’s the first national pharmacy chain to begin building a primary care infrastructure in its retail locations using doctors, as opposed to nurse practitioners.
With the Village Medical at Walgreens expansion, Walgreens is doubling down on primary care at a time of significant disruption for the Illinois-based company. Analysts and investors have been concerned about future growth, shrinking its shares’ value by 43% over the past five years.
Currently, Walgreens is exploring a full sale of its Boots business, which operates a chain of drugstores in the U.K., as it focuses more on the U.S. healthcare delivery business.
It’s steadily added more healthcare capabilities, including investing $330 million in home care provider CareCentrix and $970 million in a specialty pharmacy company, Shields Health Solutions, last fall. Those will be grouped into a new business segment, called Walgreens Health.
https://www.healthcaredive.com/news/walgreens-villagemd-to-open-200-clinics-2022/619009/
Note from the Editor
On february 17, 2022, HealthcareDive reported in the article “Walgreens, VillageMD on track to open 200 co-branded clinics this year”,
Dive Brief:
- Pharmacy giant Walgreens and value-based medical network VillageMD are on pace to open more than 200 co-branded primary care practices by the end of the year.
- On Wednesday, the companies opened their first clinic in a new Florida market, Jacksonville, bringing their total markets in the state up to three, including Orlando and Tampa.
- Walgreens and VillageMD plan to open five new Village Medical at Walgreens primary care practices in total in the Jacksonville area through this summer.
- With the Jacksonville openings, Walgreens and VillageMD have now opened more than 80 primary care practices across 12 markets in Arizona, Florida, Texas, Kentucky and Indiana.
Dive Insight:
There’s a race afoot among drugstore chains to build out nationwide medical clinics, as consumers increasingly look for low-cost, convenient care options close to the home after two years of the COVID-19 pandemic.
Players like CVS Health, Walmart and Walgreens have funneled billions into these primary care initiatives in a bid to operate the next go-to neighborhood health destination for the American public and bring in the revenue it provides.
Walgreens’ partnership with VillageMD started roughly three years ago, with a trial of five practices in the Houston area. The retailer announced plans to take the co-branded clinics nationwide in 2020, before accelerating its investment in January of last year.
Walgreens then doubled its ownership stake in VillageMD in October, pledging additional investment of $5.2 billion. At the time, the companies said the cash would accelerate the opening of 600 Village Medical at Walgreens primary care practices in more than 30 U.S. markets by 2025, and 1,000 by 2027 — benchmarks that the companies are still on track to meet, a spokesperson told Healthcare Dive on Thursday.
VillageMD doesn’t have an exact count of the patients served at Village Medical at Walgreens locations, but VillageMD is responsible for 1.6 million patients overall, the spokesperson said.
More than half of the co-branded clinics will be in underserved areas, according to the companies. Primary care initiatives often zero in on regions with high incidence of chronic conditions, like Texas and Florida. In Florida, where the new sites are opening, the number of people with three or more chronic health conditions continues to increase, from 2.4 million people in 2015 to a projected 6.2 million people by 2030, according to the Partnership to Fight Chronic Disease.
Nine-year-old VillageMD, which operates more than 200 clinics across 15 markets, has a coordinated care model using a tech-enabled platform and physician-led care teams including doctors and pharmacists to manage patient care.
The private company has grown rapidly, increasing revenues from $217 million in 2017 to $1.3 billion expected in 2021. The spokesperson declined to share VillageMD’s exact revenue last year, but did confirm that the Chicago-based company still plans to conduct an IPO this year, barring “any unusual or unexpected circumstances.”
VillageMD announced Tuesday it had acquired patient education company Healthy Interactions for an undisclosed amount, in a bid to strengthen patients’ relationships with their providers in chronic care management and boost medication adherence, while reducing overall costs.
Village Medical and Village Medical at Walgreens providers plan to offer the program in 14 markets by the end of this year.
Walgreens has been going down the partnership route to build out clinics. Such relationships can be beneficial for primary care networks, as they can lean on the heft and coffers of deep-pocketed operators with nationwide scale. It’s especially useful for senior-focused clinical companies like VillageMD and Oak Street Health as they scramble to increase their offerings to capture a bigger chunk of the senior population.
Walmart has partnered with primary care startup Oak Street Health to bring its value-based clinics to Walmart supercenters in the Dallas-Fort Worth area, as the retailer continues to expand its network of massive “health superstores” in underserved regions.
CVS Health, however, is going at it alone. The drugstore giant is currently undergoing a massive revamp of its stores, including the opening of new primary care locations that include on-site doctors and enhanced health-focused HealthHUB locations, and has a leg up already when it comes to the reach of its existing network.
Currently, CVS reaches 45% of the U.S. population with its HealthHUBs and MinuteClinics, urgent care locations staffed by nurse practitioners, and plans to open a few hundred additional primary care centers, CVS EVP Alan Lotvin said at the company’s investor day in December.
The addition of doctors to CVS’ primary care locations cancels out what used to be a key differentiator for Walgreens, which has previously stressed how it’s the first national pharmacy chain to begin building a primary care infrastructure in its retail locations using doctors, as opposed to nurse practitioners.
With the Village Medical at Walgreens expansion, Walgreens is doubling down on primary care at a time of significant disruption for the Illinois-based company. Analysts and investors have been concerned about future growth, shrinking its shares’ value by 43% over the past five years.
Currently, Walgreens is exploring a full sale of its Boots business, which operates a chain of drugstores in the U.K., as it focuses more on the U.S. healthcare delivery business.
It’s steadily added more healthcare capabilities, including investing $330 million in home care provider CareCentrix and $970 million in a specialty pharmacy company, Shields Health Solutions, last fall. Those will be grouped into a new business segment, called Walgreens Health.
Note from the Editor
On february 17, 2022, HealthcareDive reported in the article “Walgreens, VillageMD on track to open 200 co-branded clinics this year”,
Dive Brief:
- Pharmacy giant Walgreens and value-based medical network VillageMD are on pace to open more than 200 co-branded primary care practices by the end of the year.
- On Wednesday, the companies opened their first clinic in a new Florida market, Jacksonville, bringing their total markets in the state up to three, including Orlando and Tampa.
- Walgreens and VillageMD plan to open five new Village Medical at Walgreens primary care practices in total in the Jacksonville area through this summer.
- With the Jacksonville openings, Walgreens and VillageMD have now opened more than 80 primary care practices across 12 markets in Arizona, Florida, Texas, Kentucky and Indiana.
Dive Insight:
There’s a race afoot among drugstore chains to build out nationwide medical clinics, as consumers increasingly look for low-cost, convenient care options close to the home after two years of the COVID-19 pandemic.
Players like CVS Health, Walmart and Walgreens have funneled billions into these primary care initiatives in a bid to operate the next go-to neighborhood health destination for the American public and bring in the revenue it provides.
Walgreens’ partnership with VillageMD started roughly three years ago, with a trial of five practices in the Houston area. The retailer announced plans to take the co-branded clinics nationwide in 2020, before accelerating its investment in January of last year.
Walgreens then doubled its ownership stake in VillageMD in October, pledging additional investment of $5.2 billion. At the time, the companies said the cash would accelerate the opening of 600 Village Medical at Walgreens primary care practices in more than 30 U.S. markets by 2025, and 1,000 by 2027 — benchmarks that the companies are still on track to meet, a spokesperson told Healthcare Dive on Thursday.
VillageMD doesn’t have an exact count of the patients served at Village Medical at Walgreens locations, but VillageMD is responsible for 1.6 million patients overall, the spokesperson said.
More than half of the co-branded clinics will be in underserved areas, according to the companies. Primary care initiatives often zero in on regions with high incidence of chronic conditions, like Texas and Florida. In Florida, where the new sites are opening, the number of people with three or more chronic health conditions continues to increase, from 2.4 million people in 2015 to a projected 6.2 million people by 2030, according to the Partnership to Fight Chronic Disease.
Nine-year-old VillageMD, which operates more than 200 clinics across 15 markets, has a coordinated care model using a tech-enabled platform and physician-led care teams including doctors and pharmacists to manage patient care.
The private company has grown rapidly, increasing revenues from $217 million in 2017 to $1.3 billion expected in 2021. The spokesperson declined to share VillageMD’s exact revenue last year, but did confirm that the Chicago-based company still plans to conduct an IPO this year, barring “any unusual or unexpected circumstances.”
VillageMD announced Tuesday it had acquired patient education company Healthy Interactions for an undisclosed amount, in a bid to strengthen patients’ relationships with their providers in chronic care management and boost medication adherence, while reducing overall costs.
Village Medical and Village Medical at Walgreens providers plan to offer the program in 14 markets by the end of this year.
Walgreens has been going down the partnership route to build out clinics. Such relationships can be beneficial for primary care networks, as they can lean on the heft and coffers of deep-pocketed operators with nationwide scale. It’s especially useful for senior-focused clinical companies like VillageMD and Oak Street Health as they scramble to increase their offerings to capture a bigger chunk of the senior population.
Walmart has partnered with primary care startup Oak Street Health to bring its value-based clinics to Walmart supercenters in the Dallas-Fort Worth area, as the retailer continues to expand its network of massive “health superstores” in underserved regions.
CVS Health, however, is going at it alone. The drugstore giant is currently undergoing a massive revamp of its stores, including the opening of new primary care locations that include on-site doctors and enhanced health-focused HealthHUB locations, and has a leg up already when it comes to the reach of its existing network.
Currently, CVS reaches 45% of the U.S. population with its HealthHUBs and MinuteClinics, urgent care locations staffed by nurse practitioners, and plans to open a few hundred additional primary care centers, CVS EVP Alan Lotvin said at the company’s investor day in December.
The addition of doctors to CVS’ primary care locations cancels out what used to be a key differentiator for Walgreens, which has previously stressed how it’s the first national pharmacy chain to begin building a primary care infrastructure in its retail locations using doctors, as opposed to nurse practitioners.
With the Village Medical at Walgreens expansion, Walgreens is doubling down on primary care at a time of significant disruption for the Illinois-based company. Analysts and investors have been concerned about future growth, shrinking its shares’ value by 43% over the past five years.
Currently, Walgreens is exploring a full sale of its Boots business, which operates a chain of drugstores in the U.K., as it focuses more on the U.S. healthcare delivery business.
It’s steadily added more healthcare capabilities, including investing $330 million in home care provider CareCentrix and $970 million in a specialty pharmacy company, Shields Health Solutions, last fall. Those will be grouped into a new business segment, called Walgreens Health.
https://www.healthcaredive.com/news/walgreens-villagemd-to-open-200-clinics-2022/619009/
