How Walgreens, VillageMD Are Driving Home-Based Care Forward

When Walgreens Boots Alliance (Nasdaq: WBA) invested $1 billion into VillageMD, it was largely viewed as a way for Walgreens to enhance its primary care approach, especially in underserved communities.

But in July of 2020, on the day the investment was announced, VillageMD CMO Dr. Clive Fields made it known that a large part of his company’s strategy involved the home as a setting of care – something Walgreens was more than aware of.

“Just in terms of patient satisfaction, clinical results and cost-of-care quality, being able to deliver care in the home … is, in a weird way, a return back to the future,” Fields told Home Health Care News. “And we’re looking forward to extending those services.”

That’s when VillageMD and Walgreens began dating, as Dr. Thomas Cornwell – the senior medical director of Village Medical at Home, which is a part of VillageMD – puts it. At that point, they weren’t sure where the partnership would take them.

Since then, Walgreens has made further investments in the home setting, both on its own and through the partnership with VillageMD. It also made a further investment in VillageMD – another $5.2 billion – which took them from dating to married, according to Cornwell.

“I think everyone probably thinks of us as having a retail and pharmacy footprint,” Dr. Sashi Moodley, the chief clinical officer of Walgreens Health, said at Home Health Care News’ Capital+Strategy event last week. “But you know, what we announced in October at our investor day was a pretty bold vision for how we’re transforming the company and evolving to become more of a health care company. … On a macro scale, we see a lot of care moving to the home.”

Walgreens sees itself at the forefront of health care’s transformation in the U.S., and not just a vehicle working alongside that transformation. In addition to the over $6 billion invested in VillageMD – and the goal the two companies have set to open 1,000 new clinics within five years – Walgreens Boots Alliance also has a stake in the large home health care provider BrightSpring Health Services. 

It additionally recently invested $330 million in CareCentrix, a health-at-home solutions company.

“We know that home-based care can really be effective on the post-acute care side,” Moodley said. “We’ve made some investments in VillageMD beyond just the 1,000 sites we’re going to build [with them]. And then we also made an investment in CareCentrix that really focuses the post-acute care episode of a patient’s journey.”

On VillageMD’s end, it wants to be the “the largest at-risk primary care provider” in the country, and Walgreens is certainly helping it with that. At the same time, VillageMD’s model is helping Walgreens Health change the direction of Walgreens altogether.

Cornwell is the leader of Village Medical at Home and has been making house calls for decades. In fact, he’s made 34,000 house calls.

When he began to do so, it was extremely difficult to get paid for them, but it always made sense.

Now, there’s a better recognition of the value at-home care provides, and the appropriate company – VillageMD – to help support that kind of model.

“[VillageMD] has a huge desire to expand home-based primary care,” Cornwell said at the event. “And so even though we’re a small part of it, we’re the ones that really target those high-cost patients where the greatest potential savings are, and we’re working with [home-based care providers] to do so.”

Currently, at-home primary care at VillageMD is done through its patients in value-based arrangements, Cornwell said. Village Medical at Home has 25 provider partners nationally in seven markets. But VillageMD’s goal is to grow that significantly this year – all the way to 63 providers and 23 markets.

Addressing those patients in their home, the company believes, will help address the 5% of the population accounting for 50% of overall costs.

And when it works with home-based care agencies, its able to take its data-driven, evidence-based guidelines for care and share those with them.

“You’ll have this high readmission rate with home health,” Cornwell said. “And the reason is because [the agencies] and their excellent nurses can call with a patient that has heart failure, shortness of breath … looking for an order to double the Lasix, and the nurse goes in the doctor’s room, knocks on the door, and the doctor says, ‘Send them to an emergency room,’ when that’s not what you’re looking for. And by working with with with home-based primary care, the first thought is instead, ‘How can we safely keep this patient at home?’”

Because VillageMD is not necessarily restricted by the U.S. Centers for Medicare & Medicaid Services (CMS), it can also provide things like telehealth services as it pleases without worrying about reimbursements or costs.

“It’s remarkable when you take total risk,” Cornwell said. “The highest cost is the hospital, so whatever you can do to reduce hospitalizations will just create remarkable benefits and allow you to just do amazing care by keeping them out. It’s about the right care, right time, right place – and I think we are really doing that.”

As Village Medical at Home grows, it will become more integral to VillageMD. In turn, as VillageMD grows, it will become a more integral part of Walgreens Health’s mission, if the $6.2 billion wasn’t a big enough indicator already.

Along the way, VillageMD will certainly be partnering with more home-based care providers. Walgreens, on the other hand, may be more of a driver behind the home care and home health industries overall.

Their partners may look more like CareCentrix, companies that – in general – are capable of lifting the space up altogether.

“Home is an exciting area for us to continue to grow,” Moodley said. “We want to orchestrate that journey, and we’ll look to partners to be able to play in the different spaces to help us again manage populations from a risk-based perspective, which is the ultimate goal.”