Using one highly consolidated part of the health care system to solve the problems of another highly consolidated portion can be highly dubious
Instead of seeing your primary care doctor at a hospital-affiliated office, your visit might soon take place at a CVS, Walmart or even a Dollar General store.
"We're reimagining CVS locations as health destinations," CVS Health president and CEO Karen S. Lynch said during the company's "investor day" presentation in December. "We're reshaping the health care landscape."
Here is a look at the competition that hospitals will be facing in the near future:
• CVS Health, America's fourth-biggest company, is closing 300 pharmacies in each of the next three years, but at the same time setting up hundreds of primary care offices and new "HealthHubs" in other locations. CVS also took over Aetna insurance and runs Caremark, the biggest pharmacy benefit manager in the United States.
• Fellow pharmacy powerhouse Walgreens also is closing an undisclosed number of traditional drug stores, but with its new $5.2 billion primary care affiliate, VillageMD, plans to open 600 primary care clinics in more than 30 U.S. markets over the next four years. Such practices already are open in Texas, Arizona, Florida and northern Indiana.
• Walmart opened 20 health centers in Texas, Georgia, Arkansas and Illinois over the past couple of years, with more planned for Florida and other states.
• Dollar General is developing plans to serve as "a health destination," in large part because so many of its 17,000 stores in 46 states are located in rural health care "deserts." The company hired a chief medical officer last summer.
• Amazon Care, already available online with follow-up visits by a nurse practitioner to a patient’s home in much of the country, plans to add more than 20 in-person locations this year to its eight existing ones.
A spokesman for the American Hospital Association declined to comment for this story.
The new 'doctor's office': See your physician, buy a piece of chocolate
Loren Anthes, a health-care expert at Cleveland-based nonprofit Community Solutions and a lecturer at Ohio University's medical school, said the ongoing hospital consolidation and expansion is "not sustainable" because health care is moving away from traditional brick-and-mortar settings.
"They're shifting towards a more primary care model, where it's like instead of a place where you go buy greeting cards and chocolate, and then maybe pick up a medication, it'll be more like that's where you go to get your flu shot and your annual checkup, and then, if you want to on the way out, buy a piece of chocolate."
These new sources of competition could improve Americans' health care, said Ge Bai, who teaches both accounting and health policy/management at Johns Hopkins University.
"I think this is a a promising development that can have a disruptive impact on health care market competition," she said.
The challengers might find success because "they have a competitive cost structure." For example, the big box stores have to devote only a portion of their facility to the new primary care push. And the doctors they hire also can supervise much-less-expensive physicians assistants or nurse practitioners, she said.
Another key: The new competitors already are in convenient locations that often are well known to consumers.
"They're everywhere already, right?" Bai said.
Could Walmart, Dollar General help solve America's rural health care crisis?
When Dollar General announced a major expansion last year to "establish itself as a health destination," it noted that 75% of the U.S. population lives within roughly five miles of one of its 17,000-plus stores. Ohio has 940 of those stores, fifth-most in the nation.
In the same vein, Annie Patterson, Walmart's director of global communications for corporate affairs, said 90% of Americans live within 10 miles of one of the 5,100 Walmart facilities, including 172 in Ohio. Almost 4,000 of those stores are located within a federally designated medically underserved area.
The company created Walmart Health "to provide affordable, transparent pricing for key health center services for local customers, regardless of insurance status," Patterson said. Those services might vary by location, but include primary care, labs, X-ray and EKG, counseling, dental, optical, hearing, nutritional, fitness and various specialty services.
Neither Patterson nor Dollar General spokeswoman Katie Ellison would share specific plans for Ohio.
'We got a bully to beat up the bullies,' but consumers didn’t really benefit
Bai said the pharmacies and big box retailers adding health care services will benefit because they already provide an all-in-one shopping experience.
"Basically, the patient can go there, see the doctor and get the drugs five steps away. So that's another attractive feature," she said.
Talk like that worries Antonio Ciaccia, because in his world, health care consolidation manifests itself in a prescription drug supply chain with key parts occupied by a near-monopoly.
Thus using one highly consolidated part of the health care system to solve the problems of another highly consolidated portion strikes him as highly dubious. The former lobbyist for the Ohio Pharmacists Association now heads a pair of consulting companies set up to expose pricing irregularities of that drug supply chain. A main culprit of those efforts: Pharmacy benefit managers, which operate in the middle of the drug supply chain.
The three largest PBMs in America — which includes CVS's Caremark — control close to 80% of the business. And they are part of huge companies that already provide health insurance and other critical health care functions.
Ciaccia doesn't disagree with Bai that major corporations that include PBMs could disrupt sprawling medical systems' grip on hospital care. He's just pessimistic that PBM involvement will significantly help consumers or patients.
"We got a bully to beat up the bullies, but we as consumers didn’t really end up benefitting all that much — certainly not as much as both bullies."
CVS opening 250 to 350 primary care centers by the end of 2024
Mike DeAngelis, executive director of corporate communications for CVS, said the broad reach of the company makes it possible to revamp U.S. health care.
CVS already has MinuteClinics, usually staffed by nurse practitioners, in 35 states — including ones in 58 Ohio cities. In November, CVS announced the coming closure of 900 stores in the next three years, about a tenth of its total. The company pledged to keep its facilities in underserved areas and not create "pharmacy deserts." CVS has yet to announce which pharmacies will shut down.
Many will be replaced by "super clinics" at other locales as CVS starts hiring primary care doctors. The company also plans to add hundreds of HealthHUBs, which feature a "care concierge."
CVS already employs more than 40,000 physicians, pharmacists, nurses and nurse practitioners.
Pharmacy services chief: 'The PBM is an incredible cash generation engine'
Shawn M. Guertin, CVS Health's chief financial officer, said 250 to 350 primary-care centers should be open by the end of 2024.
"These will not be in medical office complexes. They will not be run the way you see physician offices run your whole life," he said.
Dr. Alan Lotvin, CVS chief of pharmacy services, said the new medical offices will open at 6 a.m. on some days, stay open until 10 p.m. on other days, and remain open on some weekend days.
Walgreens leaders say many of the people expected to use its new doctor's clinics are current customers.
"These are the same patients that frequently visit our stores and meet with our pharmacists whom we are uniquely positioned to engage with and impact their care," said Jessica Masuga, Walgreens senior manager for pharmacy and health care communications.
"We’re bringing physicians and pharmacists together to improve care and ensure patients have ongoing access to support that helps them get and stay healthy—ultimately making health care simpler."
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