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Walgreen Clinics Add Care of Chronic Illnesses to Boost Sales

April 04, 2013

Walgreen Co. (WAG:US), the largest U.S. drugstore chain, is expanding into treatment of diabetes, asthma and other chronic illnesses to lure new customers including millions gaining insurance under the Affordable Care Act.

More than 330 of Walgreen’s roughly 370 Take Care Clinics in stores are now offering chronic-care services as well as advising consumers on whether to seek preventive care such as laboratory tests, the Deerfield, Illinois-based company said today in a statement.

Walgreen and rivals CVS Caremark Corp. (CVS:US) and Rite Aid Corp. (RAD:US) are expanding beyond filling prescriptions and giving flu shots into chronic care traditionally provided by doctors. Walgreen said it’s responding to the aging population, the rising prevalence of long-term ailments and complaints by consumers about a lack of access to doctors.

“As we see thousands of patients every day, many of them say, ‘I am here because I can’t get an appointment at my doctor’s office,’” Alan London, a physician and chief medical officer for Take Care Clinics, said yesterday in a telephone interview.

Some family doctors have responded to competition from retail clinics, with 75 percent now offering same-day scheduling, while more than half have weekend or evening hours, according to Jeffrey Cain, president of the American Academy of Family Physicians, a Leawood, Kansas-based group representing 106,000 doctors.

Doctors’ Opposition

The academy opposes retail clinics providing services beyond “minor acute illnesses” and in particular objects to “the management of chronic medical conditions in this setting,” according to a statement on its website.

“Our concern is that expansion of retail clinics from urgent care into chronic care means they may get a piece of their diabetes here, blood pressure there,” Cain, a family physician in Denver, said yesterday in a telephone interview. “Our health care system is already fragmented.”

Obama’s health law, which passed Congress in 2010, may extend insurance over the next decade to about 27 million people who are currently uninsured. The Congressional Budget Office estimates that 8 million more people will enroll in Medicaid programs next year because of the expansion, which raises income-eligibility limits.

As Walgreen expands into chronic-care services, it’s coordinating care of customers with doctors, medical practices and health systems, London said. The task is complicated by the large number of systems tracking electronic medical records, he said.

Chronic Profits

At Walgreen, nurse practitioners and physician assistants assess, treat and manage chronic conditions. That category accounts for 77 percent of U.S. health-care spending, according to Kermit Crawford, president of the retailer’s pharmacy, health and wellness division. Chronic patients are also more profitable than acute patients, he told analysts in February.

CVS’s in-store clinics, called MinuteClinic, increased same-store sales by more than 38 percent in the fourth quarter, Chief Executive Officer Larry Merlo told analysts in February. Woonsocket, Rhode Island-based CVS plans to open 150 clinics this year, giving it about 800 clinics in total, he said.

Rite Aid said last month that 58 of its pharmacies in Baltimore, Boston, Philadelphia and Pittsburgh are using the Internet to allow customers to talk to doctors and nurses at remote locations. The Camp Hill, Pennsylvania-based company introduced the services in nine Detroit pharmacies in 2011.

London declined to disclose sales by Take Care Clinics, which was acquired by Walgreen in 2007, when Take Care had 51 clinics. The number has grown to more than 700 on the premises of companies and wellness centers as well as in its stores.

Walgreen isn’t expanding into chronic-care treatment in approximately 40 stores in Missouri, where state law requires a person who sees a nurse practitioner also to see a doctor if the practitioner makes a new diagnosis of a chronic disease, London said.

To contact the reporter on this story: Chris Burritt in Greensboro at

To contact the editor responsible for this story: Kevin Orland at

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