Analysis: CVS, Walgreens look to the chronically ill for a pharmacy cure

The Wall Street Journal is reporting that “CVS Health Corp. and Walgreens Boots Alliance Inc. are remodeling hundreds of stores into medical-service centers targeted at customers with conditions like diabetes, heart disease and hypertension. The idea is to make customers just as likely to stop in for medicine, consultations and lab tests as for lipstick or a candy bar. CVS sees roughly 1,000 of its more than 9,800 retail stores becoming bigger hubs, offering a range of medical services, while Walgreens envisions a similar setup for about 1,500 of its 9,600 U.S. locations.

Those locations — CVS calls them “health hubs” and Walgreens terms them “neighborhood health destinations” — will anchor a broader network of more traditional drugstores that will be tweaked to focus more on health and less on traditional retail. 

Chief Executive Stefano Pessina says data collected by Walgreens can ultimately be used to flag unhealthy behaviors in consumers. Among Walgreens’ new features will be an app that encourages customers to log their diets and other information and that alerts users to the consequences of their choices. For similar reasons, Aetna is central to CVS’s latest mission. With access to its insurance rolls, CVS pharmacists will be able to reach out directly to customers with chronic health conditions and encourage them to come to the store for a consult on services they can access. If CVS’s approach works, Aetna’s data can then be used to demonstrate savings and, the company hopes, woo other insurers into using its model.”

Takeaway

One of the biggest challenges providers face trying to manage population health is the lag in claims data to understand when the patient has had a health event. As the Wall Street Journal article calls out, the care teams in CVS should have access to Aetna’s claims data for attributed patients in close to real time. This will allow them to more quickly identify high-risk and rising risk patients to develop more tailored care plans. As an example, because they will likely have the pharmaceutical data for a large percentage, if not all of their attributed patients, the CVS care team will be able to identify issues of medication adherence or medication interaction as they happen (e.g., a missed refill after the prescription supply should have run out). The net effect of this will be some reduction in potentially preventable emergency room visits and inpatient admissions.

While the article doesn’t focus on it, I still think CVS, in particular, has the potential to disrupt volume for relatively healthy individuals as well. We’re seeing a large number of millennials eschewing relationships with traditional primary care providers and using retail clinics. When these individuals need services that are beyond the capabilities of the walk-in clinic, it’s the CVS provider who will make the referral to the next site of service. My guess is that referral will be based, in part, on Aetna’s use of claims data to determine efficient providers. According to Modern Healthcare, “CVS has already invested in an AI platform to triage and automate referrals.” The claims piece is the next logical step. If a health system wants its specialists to be at the front of the line for that referral, it will need to demonstrate a lower total cost of care for the episode.