Why Walgreens, VillageMD See the Home as an ‘Increasingly Relevant’ Health Care Vertical

This article is a part of your HHCN+ Membership

Everyone wants to know what Walgreens Boots Alliance’s (Nasdaq: WBA) health care strategy is.

Over the past month, it has become increasingly clear.

On Oct. 14, the company made another investment in the primary care company VillageMD. The price tag was $5.2 billion for Walgreens, following a $1 billion investment in VillageMD last year as part of a five-year plan.


“We know that health care is inherently local. Also, the needs of communities are diverse, and Walgreens has a deep understanding of the neighborhoods and towns we are in, and VillageMD shares this understanding,” Jamie Vortherms, the VP of health care services at Walgreens, told Home Health Care News in an email. “Together, Walgreens and VillageMD are well positioned to meet [seniors] where they are, be it through our co-locations, digitally or in the home.”

Based in Chicago, VillageMD – through its subsidiary Village Medical – is a provider of primary care, with a strong focus on home- and community-based care. It serves 1.6 million patients in 15 markets, with ambitions for continued growth with the backing of Walgreens over the coming years.

Although VillageMD was confident from the jump, Walgreens’ continued interest in working with and investing in its model has put a charge behind the company’s mission.


“We were always interested in working with strategic partners that would help drive our mission,” VillageMD CMO Dr. Clive Fields told HHCN. “The initial investment met that definition, but I don’t think anybody really could have predicted how quickly and how successfully the partnership could have grown. I wish I could tell you that myself and the executive team were smart enough to have been able to predict it, but we’re certainly thrilled with the validation that this add-on investment brings.”

The recent investment more than doubled Walgreens’ stake in the company, from 30% to 63%.

“We see a range of patients, including the most complex patients, and our data and our feedback continues to say that they should be taken care of in the home,” Fields said. “When a doctor looks at their schedule, they kind of know that 20 minutes is literally not enough time.”

To get patients from the car, into the room and then into a position where they can be examined, all in a short time period, is just not feasible, Fields said. And it’s also burdensome on the patient.

“Those are patients that should be taken care of at home,” he added.

VillageMD’s continued commitment to a house-call style of business is not just an ancillary part of its brand. In actuality, the in-home care strategy played an important role in talks with Walgreens.

That became evident when Walgreens also invested $330 million in CareCentrix – a prominent health-at-home solutions company – earlier this month.

“We are already expanding our home-based care offerings through a majority investment in CareCentrix,” Vortherms said. “In addition to expanding capabilities in primary care and post-acute, home care is another important part of the patient journey and fast-growing segment of the market.”

Vortherms called home care an “increasingly relevant and growing health care vertical.” VillageMD and CareCentrix each will help Walgreens take the next steps in its overall health strategy.

“This is an opportunity to further expand our capabilities, while playing an even greater role in coordinating a patient’s journey from the hospital to the home,” she said.

A new system

Walgreens — a near-$140 billion company — has been around for over 100 years and is a massive enterprise. But that hasn’t stopped it from investing in a strategy that sets it up for a health care system that doesn’t completely exist yet.

It’s betting billions of dollars on a new care system, centered around the home, community and value. While plenty of insiders believe that’s where health care is headed, the traditional way of doing things is still very much in place.

“The old system, it was predominantly a fee-for-service system, and it really made for difficult access issues for patients,” Fields said. “We were continually trying to put square pegs in round holes. And what we continue to see at VillageMD is a doubling down and reinvestment in our Village at Home strategy, which is comprehensive primary care in the home.”

The second investment in VillageMD will allow it to open 600 more “Village Medial at Walgreens” primary care practices in the next four years. It will also fuel expansion into 30 more markets across the country.

And that doubling down will, in turn, increase the amount of home-based care providers that VillageMD works with to facilitate care in the home.

“We look forward to working with home health care providers that can provide the kinds of high quality and effective services that we’re trying to drive across the continuum for our patients,” Fields said. “And most importantly, for the most fragile patients, which are the ones that are being taken care of at home.”

A new system has been on Walgreens’ mind for some time.

But just as it did for many other health care providers, the COVID-19 pandemic accelerated its future-facing strategies.

“We have been focused on establishing our position as a health care destination,” Vortherms said. “We’ve expanded our health care offerings through strategic partnerships like that with VillageMD. It’s also accelerated as the COVID-19 pandemic has redefined the role of the corner pharmacy in the minds of consumers as they rely on us for their vaccinations, essential medicines and other health care needs.”

Companies featured in this article: