CVS, Walmart, Amazon, and Walgreens Boots Alliance have all been trading moves in recent years to get an advantage in the healthcare sector — and the latest of those moves comes from Walgreens.
The Northbrook, Ill.-based company is now partnering with tech company Pearl Health to provide software and services to help primary care doctors switch from fee-for-service to value-based care, reports Forbes.
Value-based care and fee-for-service are two ways doctors and hospitals get paid for treating patients.
In fee-for-service, healthcare providers get paid for each test, treatment, or procedure they do. In value-based care, healthcare providers are rewarded for treating patients in a more effective way. Rather than paying for each individual test or treatment, they might get a lump sum or bonus for general wellness or successfully treating a condition.
The value-based care aims to improve overall patient health while also controlling costs.
Most insurance companies now pay doctors the value-based way — with the Pearl Health partnership, Walgreens is making the case that tech is needed to handle those kinds of payments..
“Our partnership with Pearl Health allows us to reach more communities faster and enable comprehensive, affordable care that improves long-term health outcomes and fosters healthier communities,” said John Driscoll, executive vice president and president of U.S. Healthcare for Walgreens.
Walgreens has invested heavily to expand its healthcare reach. Former Walgreens CEO Roz Brewer resigned less than two weeks ago, and the company has said it wants Brewer’s replacement to have strong healthcare ties.
In 2021, Walgreens invested $5.2 billion to take a majority stake in VillageMD, a primary care practice. In early August, Walgreens announced the opening of the first Village Medical at a Walgreens primary care practice in Elk Grove Village, Ill., located outside of Chicago.
VillageMD also recently purchased Summit Health for $8.9 billion, which only bolsters Walgreen’s on-site healthcare business.
Meanwhile, CVS acquired Signify Health for $8 billion and Oak Street Health for $10.6 billion, which carry a network of staffed clinics.
Signify Health is perhaps best known for its home health business. Oak Street’s Medicare-focused services complement CVS’s own assets, including its 1,100-plus MinuteClinics.
The merger also has enhanced access to CVS’s nurse practitioner workforce, and CVS can now provide “wraparound” services such as medication reconciliation and post-discharge follow-ups.
By 2026, Oak Street Health expects to operate more than 300 centers. CVS also owns health insurer Aetna.