It's been a tough year for retail healthcare, with organizations such as Walmart, Walgreens' VillageMD and Dollar General all shuttering or scaling back services.
For Walmart, the decision to close its 51 clinics and telehealth offerings stemmed from a "challenging reimbursement environment" and rising operating costs, resulting in a lack of profitability, and Dollar General ended its mobile clinic pilot 18 months after launch.
VillageMD has exited Nevada, Florida, Illinois and Indiana, and sold several of its Rhode Island locations as part of majority owner Walgreens' plan to cut $1 billion in costs this year. Walgreens posted a $5.8 billion loss in the second quarter, driven by the devaluation of VillageMD.
When asked a question about the challenges facing VillageMD at AHIP's 2024 conference in Las Vegas, Walgreens Boots Alliance EVP and U.S. Healthcare President, Mary Langowski, said there's still plenty of consumer demand for healthcare in retail settings.
"A lot of this is being conflated right now, but these models are very different," Ms. Langowski said. "An advanced or value-based primary care model is very different from a fee-for-service, low-cost retail primary care clinic. And that's very different from an urgent care clinic. All of these models are being tested out and there's a lot of questions swirling around what the role of retail healthcare is going to be."
Walgreens Boots Alliance became the majority owner of VillageMD in 2021 with a $5.2 billion investment. The primary care clinic chain continued to grow larger under its ownership with the $8.9 billion acquisition of Summit Health-CityMD in 2023, which added more than 2,800 providers to its ranks. In total, VillageMD employs over 20,000 people across more than 800 practice locations in 26 markets, according to its website.
"I happen to be very bullish on the role of retail in healthcare, and frankly, having a very central role in healthcare," Ms. Langowski said. "Consumers want the ease and convenience of it. We're seeing a lot of evolution around not whether it will exist, but around what the right model is going to be."
"Our CEO, Tim Wentworth, recently said that we're taking a look at how we want to play in this space," she said. "We really think that if you take our core assets, we can be a really good partner to many provider entities and payers across the United States."