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Walgreens’ healthcare solution

BY Jim Frederick

The healthcare reform debate has reached a crescendo in Washington as Congress and the Obama Administration wrangle over cost and coverage issues. But whatever healthcare system emerges from that divisive maelstrom, Walgreen Co. isn’t waiting. Neither are the growing numbers of U.S. employers that are turning to the drug store and health services giant for help in dealing with their mounting employee healthcare costs.

For more and more of those major corporations—count Caterpillar and lawn-care giant Scotts among them—Walgreens has come to mean a lot more than the brightly lit drug store and pharmacy on Main Street. Armed with a 7,000-store network of community pharmacies and a growing arsenal of healthcare operations in areas like specialty pharmacy, home infusion and workplace clinics, Walgreens is reinventing itself as a fully integrated, cost-effective health and wellness solution for the nation’s employer-funded health plans. Taken together, these approximately 8,000 points of care are becoming increasingly attractive options for big companies looking to lower costs and improve the health outcomes of their employees.

Presently, Walgreens’ growing list of employer clients numbers more than 185 U.S. companies, and more than 375 worksite-based health centers that take on a variety of forms.

“We’re pioneering new approaches to achieve better healthcare outcomes,” Walgreens president and CEO, Greg Wasson, explained in a recent interview. Those new approaches, he said, “will integrate capabilities across all of our platforms, including pharmacies, retail clinics, call centers and mail service, to enable patients to better control their conditions.” And increasingly, Wasson noted, the company is “taking our expertise directly to employers’ campuses.”

Its message to the healthcare marketplace and managed-care community: Walgreens—with its nearly 7,000 drug stores with pharmacies in all 50 states, roughly 400 Take Care in-store health clinics, the nation’s largest home-infusion and fourth-largest specialty pharmacy businesses, more than 100 hospital-based and health-center pharmacies, and hundreds of worksite health centers—can be a convenient, market-based solution for a fractured healthcare system whose costs are reaching “unsustainable” levels, in Wasson’s words.

“The sands are shifting in our industry, because of healthcare reform and changes taking place,” he explained. “And the good thing is, when the sands do shift, it certainly causes uncertainty, but it also creates openings.”

Those openings create “a huge opportunity for community pharmacists to step up and be recognized as a non-physician healthcare provider,” said Walgreens’ president.

With the health system in dire need of cost-saving reforms and family-practice physicians increasingly overwhelmed by patient loads, Walgreens sees an opening. “There’s a shortage of primary care physicians,” he said. “Our community pharmacists and the other clinicians we’re now employing, both in stores and on employers’ campuses, can play a big role in filling the gap in primary care, as well as lowering costs.”

Walgreens’ big corporate customers certainly are not waiting around for health reform, noted Peter Hotz, president of Walgreens’ Take Care Employers Solutions division. “Most of our clients are saying they want to take action now, and we want to be part of that solution.”

While the concept of worksite-based health care is not a new one, and actually goes back to the ’30s and ’40s, the model has come a long way in that time, Hotz said. “As business evolved, the nature of workplace health…has gone from a risk-management focus to a medical-management focus—which means taking care of people when they’re sick as well as helping them navigate the healthcare system. Now it’s really more of a population health management focus, where you are not just taking care of people when they are sick, but also trying to help keep them healthy and make them more aware of their health risks,” he added.

While these facilities can scale up or down depending on the scope of services provided, the number of employees covered and the general age of the employees, generally speaking, for every $1 a company invests in worksite-based health care the savings is anywhere from $2 to $4.

One big way to cut healthcare costs for big companies that cover much of the healthcare outlays for thousands of employees, said Wasson, is for the company’s community, specialty and health center pharmacists to work with those employees to improve their compliance with their prescription drug therapy. “It’s pretty common knowledge that nearly 50% of patients on chronic medications are non-compliant in some form or fashion within four months of starting a new medication,” said Wasson. “We’ve got to be able to show we can indeed improve that compliance and save the medical system costs.”

AMERICA’S HEALTHY DEBATE

As healthcare and health insurance costs rise, so—apparently—rises skepticism about federal solutions. Recent surveys from the American Hardware Manufacturers Association (AHMA) revealed the following:

Central to Walgreens’ mission to reduce costs and improve outcomes for big healthcare payers will be its ability to integrate its community, specialty and employer-based pharmacies and clinical-care capabilities. To that end, the company unveiled a major new initiative early this year to bring together all its pharmacy and patient-care capabilities under a single service and marketing umbrella on behalf of employer-based health plan sponsors.

That program, called Complete Care and Well-Being, is an “employer-centric” pharmacy, health and wellness program that puts Walgreens pharmacies and Take Care Health clinics right on employer campuses and worksites. It’s “designed to reduce health-care and prescription costs for employers across the country,” said Wasson. “What this does is allow a ground-based approach, with clinicians on the ground, in the center, touching employees daily, a clinician or nurse or pharmacist sitting across from them, talking to the employee, connecting to whatever benefit design or structure they may have under their current program, to make it much, much more effective.

“Our goal is to make this a one-patient, one-employer, one-employee view of Walgreens,” Wasson concluded. “We want the employer to understand that Walgreens can bring all these solutions to bear.”

Employers appear to be embracing that message. Disney, for instance, hosts a massive, Walgreens-operated healthcare center and exercise facility for Disney World employees in Orlando. In Las Vegas, Harrah’s offers a similar worksite center for casino and hospitality employees.

Health reform efforts notwithstanding, partnerships between big employers and health and pharmacy providers like Walgreens are likely to grow as the search for ways to defray mounting health costs intensifies. Caterpillar, for one, recently contracted with Walgreens in a long-term arrangement that will bring transparent prescription drug pricing to Caterpillar Inc. The deal is expected to lower drug costs for the world’s largest manufacturer of construction and mining equipment—and reduce out-of-pocket expenses for its 70,000 employees—by offering many commonly prescribed generic medicines at no copay to the company’s health plan members.

The two companies also agreed to explore, through Walgreens’ Complete Care and Well-Being program, additional ways to extend integrated health care and pharmacy services to Caterpillar employees.

Separately, Walgreens said it will also provide Caterpillar health plan members a “significant” discount on all Walgreens branded and non-branded products.

Both the transparent pricing and discount programs will be effective Jan. 1, 2010.

The partnership is drawing interest from health industry experts like Josh Bellamy, Pharm.D., who is president and CEO of HealthStrategy, a business services and consulting firm. “Directly aligning pharmacies and plan sponsors enables both parties to accomplish their economic goals without sacrificing the quality of pharmacy services,” said Bellamy. “This unique approach is the solution corporate America has been looking for, as it not only saves companies money, but it also removes the ambiguity often associated with drug pricing.”

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Builders to dealers: Be proactive

BY HBSDEALER Staff

Phoenix — Federal Reserve economist Yelena Takhtamanova had both good and bad news for the attendees of the 2009 ProDealer Industry Summit (PDIS) in her address on Oct 8. The good news was that the recession is just about over. “The consensus is that we may have reached the bottom,” Takhtamanova said to a packed room of LBM dealers and suppliers. Housing starts and permits have hit their lowest point, she said, “although they didn’t have that much farther [down] to go.”

Takhtamanova was worried, however, over the 7 million jobs that have been lost since the beginning of the recession and the number of people who remain unemployed. Factoring in other data, the San Francisco economist predicted a slow, three-year recovery period before the housing market, the GDP and other indicators reach their pre-recession levels.

Faced with reluctant home buyers and a flood of foreclosed properties, Michelle Desiderio of the NAHB Research Center suggested that builders distinguish themselves with homes that carry a National Green Building Certification. Desiderio, the program director, explained the point scoring systems of the ANSI-approved designation, stressing its third-party verification system. She also gave an overview of the NAHB’s new Green Approved Products program, which lists pre-screened materials and their respective point values. “It eliminates the need for builders to do background checks on all these [green] products,” Desiderio explained.

Apanel of builders — Tony Callahan, senior VP national purchasing, planning and design for Beazer Homes; Mark Voetsch, VP purchasing and cost management for K. Hovnanian; and John Coleman, VP purchasing for Maracay Homes — discussed how the downturn has changed their purchasing and design processes. All three builders said they have removed costs from their supply chain and simplified their house models by collaborating with their suppliers.

“You need to be proactive in the process,” Voetsch said. “You should be telling us [not to] design homes that have 30 different window SKUS in them. Don’t be afraid to raise your hand and say, `I’ve got a better way.’ Just do it early in the process.”

The three-day event, which ends today, honored McCoy’s Building Supply and Home Lumber as the Home Channel News Pro Dealers of the Year. Accepting the award for McCoy’s at last night’s banquet was president and CEO Brian McCoy and his daughter, Meagan McCoy Jones, along with a team of McCoy executives that included a 40-year veteran, a 35-year veteran and a 28-year veteran of the company. Brent Johnson, who purchased his family’s California lumberyard back from Stock Building Supply, thanked his father Milt, who was also in the audience.

The National Lumber and Building Material Dealers Association (NLBMDA) installed its new officers at the Oct. 8 dinner, officially passing the gavel from ProBuild CEO Paul Hylbert, the outgoing NLBMDA chairman, to its new chairman, Dan Fesler, CEO of Lamperts.

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Around the Web: Home Depot resubmits bid for Colorado location

BY HBSDEALER Staff

In an article by the Summit Daily News, Home Depot has submitted a second plan for a 100,000-sq.-ft. store location in Silverthorne, Colo., six months after the town council approved the initial plan.

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