The fourth quarter loss reported by Walgreens Boots Alliance (Nasdaq: WBA) on Thursday is not a good indication for fiscal year 2023 and beyond, according to the company’s chief financial officer.
And, in fact, it’s banking on its home-based care investments as contributors.
Among those are VillageMD, CareCentrix and Shields Health Solutions, which will drive high contributions to the company’s bottom line as they mature, CFO James Kehoe said during the company’s earnings call.
“VillageMD had 433,000 value-based patients at the end of fiscal ‘22, up from 326,000 at the end of fiscal ‘21,” Kehoe said. “Based on execution to date and improved visibility, we are increasing our 2025 sales target for U.S. Healthcare by over 20% and we are now projecting sales of $11 to $12 billion by 2025.”
The sales for Village MD — the home-focused primary care provider — are projected at $2.8 to $3 billion in the next fiscal year, a percentage growth of up to 60% from a year ago. This is taking into account the added value-based patients at existing and new clinics opening up across the country.
For CareCentrix, Kehoe said Walgreens expects a growth of up to 30% over the next fiscal year.
“This performance reflects growth across existing and new payer and provider customers and [the] upsell of innovative new home services,” Kehoe said.
Earlier this week, WBA finalized its acquisition of the health-at-home solutions company CareCentrix.
John Driscoll, the former CEO of CareCentrix, is now the executive vice president and president of U.S. Healthcare at Walgreens.
“Simple, convenient access to low-acuity health care services is key to managing the health of our consumers,” Driscoll said during the call. “We’re starting to deliver population health services through our health corners to close care gaps and help our payer and provider partners expand their reach. In the end, scale is critical, but health care is local.”
By leveraging VillageMD and CareCentrix, Driscoll said Walgreens will be able to deliver better care at lower costs – the ultimate goal.
“CareCentrix has externally validated results showing the total cost of care reductions of up to 20% delivered with member satisfaction results routinely exceeding 90%,” Driscoll said.
Walgreens Boots Alliance CEO Rosz Brewer said fiscal year 2023 will be a year of accelerating growth and “rapidly scaling” Walgreens’ U.S. health care business.
In total, Walgreens saw sales fall by 5.3% year over year to $32.4 billion.
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