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Walgreens Boots Alliance is raising the stakes as the drugstore chain raised a long-term sales target for its expanding healthcare business and outlined its plans to become a leader in the US healthcare system.

The company has aggressively grown the business it calls US Healthcare, a division created for all of its healthcare assets, including the services it provides through its controlling interests in VillageMD, Shields and CareCentrix .

During an Oct. 13 earnings call, Walgreens CEO Rosalind Brewer told investors the company was “well on its way to transforming into a consumer-centric healthcare company.”

Pioneer in consumer health

Under a plan laid out when it launched its US Healthcare division, the company announced that it would:

  • Accelerate the path to becoming a leading provider of local clinical care services.
  • Leverage a consumer-centric technology and pharmacy network to deliver and enable others to deliver value-based care.
  • Strengthen partnerships with payers, providers and patients.

Walgreens began focusing on primary care, post-acute care and home care in 2021, when it acquired a majority stake in VillageMD. The move made Walgreens the first national drugstore chain to offer large-scale full-service doctor’s offices located in its stores. Walgreens operates 342 clinics and 152 co-located clinics, and is on track to meet its goal of opening up to 1,000 clinics by 2027.

The company quickly expanded its healthcare footprint by acquiring majority stakes in CareCentrix, a provider of home healthcare services including nursing, infusion and palliative care services, and Shields Health Solutions, a specialty pharmacy that serves health systems.

Last week, Walgreens announced it had reached a $392 million deal to acquire the remaining 45% stake of CareCentrix, which will give it full ownership of the home health services company if the sale goes through. closes on schedule in March 2023. Walgreens also recently announced plans to purchase the remaining stake in Shields by the end of 2022.

CareCentrix manages the care of more than 19 million patients at nearly 7,500 provider locations. It offers home nursing care, home infusions, medical equipment and home palliative care. In its 2021 fiscal year, CareCentrix had revenue of $1.5 billion. Shields, which serves more than 700 health systems, is also a revenue driver – reporting sales growth of 57% in the first nine months of this year.

Big changes in senior management

Walgreens also made major changes to its executive management. In November, John Standley will step down as chairman of Walgreens and the company will be reorganized under two leaders. Lee Cooper, CEO of Shields, takes over operations of the pharmacy, and Tracey Brown, President of Retail Products and Chief Customer Officer, will lead retail operations. CareCentrix CEO John Driscoll has been named executive vice president and president of US Healthcare at Walgreens.

“We are building a nationwide healthcare company that will leverage our entire portfolio to deliver better care at lower cost,” Driscoll told investors.

And after?

The pandemic has opened up new opportunities for retail businesses to expand into areas of the US healthcare system. The explosion of telehealth has demonstrated that patients are increasingly comfortable seeking care in non-traditional settings. Walgreens and many of its competitors have taken advantage of this opportunity to expand into uncharted areas.

CVS Health Corp. – the largest retail healthcare provider in the United States and owner of health insurer Aetna – recently beat Amazon to acquire home-care provider Signify Health for $8 billion and is eyeing a Bloomberg acquisition: CVS is in Exclusive Discussions to buy Cano Health”>Cano Health Inc., another home care provider.

Retail giants Best Buy, Walmart and Amazon are also ramping up efforts to meet consumers’ health care needs. In the past year, Best Buy bought patient monitoring technology provider Current Health for $400 million; Walmart acquired telehealth provider MeMD (now Walmart Health Virtual Care); and Amazon has reached an agreement to acquire One Medical, a membership-based primary care provider.

Walgreens, CVS and Walmart have all announced plans to soon use their stores and clinics as clinical trial sites. Additionally, industry experts predict that retailers will increase their investments in key technologies and tackle issues such as social determinants of health and data sharing to deliver personalized healthcare experiences to their customers. .