Walgreens last week entered into a strategic partnership with Pearl Health, a technology platform for primary care physicians in value-based care arrangements. The companies will help community-based primary care physicians manage value-based care in ACO Reach, Medicare’s accountable care program, starting in 2024 and eventually plan to expand to Medicare Advantage and potentially commercial payers and Medicare in the future.
Just days earlier, Bloomberg reported that Walmart was exploring the purchase of a majority stake in ChenMed, a value-based care organization of more than 125 primary care clinics in 15 states focused on treating older adults. If the deal goes through, it will cost Walmart several billion dollars, the report notes.
The respective moves have some analysts questioning just how much the retailers could gain from these initiatives given that the companies have had difficulty to date showing positive financial returns for their hefty health care investments. Moreover, the timing of the initiatives is curious, notes The American Hospital Association.
Walmart largely has remained on the sidelines over the past several years as some of its competitors were planning and scaling their primary care operations through acquisitions. In February, Amazon closed on its acquisition of the primary care company One Medical for $3.9 billion and CVS Health expanded its primary care footprint by completing its purchase of Oak Street Health for $10.6 billion. And now, Walgreens has a majority interest in primary care provider VillageMD, and bought primary, specialty and urgent care provider Summit Health+CityMD for $8.9 billion in November.
ChenMed is seen as one of a rapidly shrinking list of large, primary care assets that still can be acquired. But the company is going through a major leadership change after Steve Nelson took over as president in August. Nelson, a former UnitedHealthcare CEO, most recently served as CEO of JenCare, within the ChenMed family of companies, and before that was co-chair and CEO of Duly Health and Care, an Illinois-based multispecialty physician group.
Walgreens also experienced a major leadership shakeup after Rosalind Brewer, CEO, stepped down earlier this month as part of a mutual agreement with the board of directors after just two years at the helm. Brewer came to Walgreens after serving as chief operating officer and group president for Starbucks. Now, the retailer says it is seeking someone with a strong health care background to lead the company. Read more.
