VillageMD has effectively taken a home-based approach to primary care since its inception. That, plus its risk-based model, has made its services especially relevant over the last year.
Founded in 2013, the Chicago-based VillageMD, through its subsidiary Village Medical, provides value-based primary care services. It has grown from a primary care practice of 13 physicians to a network of more than 2,800 across nine markets.
This past summer, it netted a massive partnership with Walgreens Boots Alliance (Nasdaq: WBA). Specifically, Walgreens announced it will invest $1 billion in equity and convertible debt into VillageMD over the next three years. That includes a $250 million equity investment already completed in July.
The companies’ plan, which is dubbed “Village Medical at Walgreens,” originally launched after a successful pilot at five in-store clinics in the Houston market. It is now in Phoenix as well, with the overall goal being to hire 3,600 physicians and enter 30 additional U.S. markets.
Home Health Care News recently sat down with VillageMD CEO Tim Barry to get an update on how that partnership is going, what has changed in health care over the last year and why VillageMD continues to invest in home-based care.
Highlights from HHCN’s conversation are included below, edited for length and clarity.
HHCN: Last time I talked to VillageMD, things were just getting started with Walgreens. You two have a good amount of time underneath your belts as partners now, so how is everything going?
Barry: The rollout is going incredibly well. We are really pleased with the level of excitement that patients have about these really convenient, full-service primary care clinics. The doctors are very excited about these clinics that are right in the neighborhoods where they practice. The pharmacists on the Walgreens side of the house, I think, are very much enjoying this level of interactivity and integration with the primary care team.
Medication adherence rates for patients who are diabetic, hypertensive and have high cholesterol is at the highest levels you can achieve in the Medicare program. So I’d say so far, we’re off to a great start.
How closely is VillageMD working with Walgreens? From a business perspective, how does it work between you two on a day-to-day basis?
We work together a fair amount. We got into the relationship because we believe, as a risk-based provider, one of the things that’s most important is that you provide better patient care to those patients who have chronic disease. So from our vantage point, the most important thing that we could do is to really keep building upon this proactive, high-touch, 24/7 model of primary care that we have, really making sure that the pharmacist is an integral part of it.
So you view them as a strategic-type partner?
Yes. When you’re managing people who have a lot going on from a health perspective, you really want to make sure that they’re on the right medications — that they’re taking the right medications at the right time and can afford those medications.
I think it’s been a miss in our health care system that we’ve not integrated primary care and pharmacy to the degree that we do with Walgreens today. So we do view them truly as a strategic partner, not just someone who made a billion dollar investment in us and who has really great real estate. We really see them as a clinical partner who we know can help us drive to better outcomes for our patients.
How do you see home-based care as part of your mission? And why is such an important part of what you guys are doing?
There’s a number of different reasons. If we look at the way health care delivery has worked over the last several decades, I would not describe it as being all that consumer-focused. We’ve sort of made people come to the medical establishment, right? We didn’t design medical clinics that necessarily had healing in mind. They were kind of set up to help the doctors be really effective and efficient, instead of thinking about what would be the best experience for a patient.
Frankly, most of the care that was being provided was all facility-based. It was either in a clinic, in a surgery center or somewhere else. So we thought about consumers having to deal with and work with the health care system, instead of changing our mindset like most other consumer-oriented industries to say, “How do we weave ourselves into the fabric of people’s lives?”
And so part of it is just an appreciation that consumers or patients should not always have to take the day off to go see a doctor and sit and have all these tests done. Instead, how do we think about bringing the service and the doctor and the people who can help individuals into the home — or wherever that individual is? Telehealth is a great example of the ability to care for people wherever they are. Providing care in the home is another avenue for doing that.
What’s another one of those reasons you’re committed to home-based care?
The second part is also just as an appreciation that, as a risk-bearing provider, we have a lot of patients who are homebound. Even if they’re not homebound, they’re sick, pretty complex, and have to organize themselves or maybe even have a caregiver take a day off to come pick them up and bring them into a clinic. It’s just a challenging experience, so we said, “Why do we not instead go to them?”
And by doing that we can, we can see everything that’s going on in the home front.
If there are certain issues or things that concern us when we go into the home, we can address those. For instance, I did a home visit with one of our doctors, and we visited a 90-year-old gentleman who used a walker to get around his house. And he had a really thick carpet right in the middle of his living room. And he had tripped over that carpet, fallen and broken his hip. And so we realized with his walker he was tripping on the carpet, so we needed to think of another solution outside of having this really thick carpet in the middle of the room.
So when you’re able to get up and go into the home, you’re able to see a whole different set of variables in the equation for a doctor to figure out what’s the best solution for the patient. So it’s really those two reasons, a consumer focus, but also an appreciation that for high-risk folks, we should be going to them.
It’s a less traumatic experience and it’s a more comfortable experience. And we also get a better picture of everything going on with the patient.
VillageMD has a home-based care focus, and it is also risk-based, as just mentioned. You’re also going into the communities that probably have health care issues that have been exacerbated by the COVID crisis. In some ways, it seems like you guys are kind of built for the moment. Is that a feeling you have had over the last year or so?
I totally agree. Sadly, this is something that should have been done a long time ago. And if we all had the benefit of hindsight, and we were able to start over, I think you’d really start with advanced primary care, which is what we represent, and you would integrate pharmacy into it. Just because I think the moment is helping us all realize that there’s tremendous disparity on all this on many different levels across the communities where we are.
In the strategic conversations that we had with Walgreens, we recognized that both companies have a strong orientation to make a difference in the local community. And we said, “It should be us, it should be our organizations who kind of lead the way and go into these medically underserved communities and bring a solution that ultimately will allow people to live better lives.”
So we feel really good about what we’re doing. And I know Walgreens feels great about it as well.
What — if anything — has recently changed VillageMD’s outlook moving forward?
I think that there are a couple different things, when we look at what has happened as a result of COVID. One of them is the continued use of telehealth and digital health tools. There’s no question that the consumer base, the patient base at large, has developed a greater comfort level with using technology to access the health care system. And telehealth is a big part of that.
And so what we had been doing even prior to COVID was rolling out avenues for how we use telehealth in a more coordinated, integrated way. Not just offering telehealth because someone’s got a headache and they want to talk to their doctor. But thinking about those patients who have chronic disease, and how we can find more avenues to be able to engage with those patients to make sure that we’re helping them manage their condition. So we’ve accelerated a fair amount of our technology investment in terms of continuing to engage our patients through telehealth. So that’s one thing.
What has changed specifically for primary care?
As a result of COVID, there’s a lot of primary care doctors who have been independent who are saying, “Gosh, maybe I don’t want to continue to be independent anymore.” This crisis has created some financial strain on a lot of those independent practices.
But more importantly, a lot of them have sort of come to the realization that if they were working in a capitated or an at-risk model, their focus would not have been on just keeping their practice open and patients alive, but it would have been on making sure that they were optimizing the care for the their whole population.
And those are two very distinct approaches to care delivery. And I think there’s a continued awakening on behalf of primary care doctors … which is, maybe we ought to be working with a population orientation. And the combination of that technology along with the trend around doctors thinking about value is definitely making us feel good about the fact that we are accelerating our growth when we are.