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Clinical Laboratories and Pathology Groups

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Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Walgreens, CVS Add New Healthcare Services and Technology to Their Retail Locations; Is Medical Laboratory Testing Soon to Be Included?

Expanding healthcare services into communities is expected to increase orders for clinical laboratory tests, promote precision medicine, and lower overall costs

Clinical laboratories continue to adapt to servicing providers in non-traditional healthcare settings. These include freestanding urgent care centers as well as mini-clinics in retail locations. Dark Daily has covered this trend extensively in previous e-briefings.

To secure a share of this new market, national retailers, pharmacy chains, and grocery stores are increasing their health and medical service offerings and forging partnerships with other organizations, such as tech developers.

One such recent partnership involves Walgreens Boots Alliance Inc. (NYSE:WBA) and the Microsoft Corporation (NASDAQ:MSFT). In January, both parties announced a joint venture to develop new healthcare solutions that will improve patient outcomes while lowering cost through research and development, funding, and technology.

“Our strategic partnership with Microsoft demonstrates our strong commitment to creating integrated, next-generation, digitally-enabled healthcare delivery solutions for our customers, transforming our stores into modern neighborhood health destinations, and expanding customer offerings,” said Stefano Pessina, Executive Vice Chairman and Chief Executive Officer of Walgreens, in a Microsoft press release.

Through this partnership, Walgreens plans to provide personalized healthcare (aka, precision medicine) by connecting its customers to pertinent health information through digital devices and in-store expert advice. The goal is to proactively engage patients in their own care to improve medication adherence, reduce emergency room visits, decrease hospital readmissions, and provide customers with lifestyle management solutions.

In addition, the two companies will share each other’s market research and work with consumers, payers, providers, and pharmaceutical manufacturers to devise solutions that improve health outcomes while lowering costs.

“[Walgreens Boot Alliance] will work with Microsoft to harness the information that exists between payers and healthcare providers to leverage, in the interest of patients and with their consent, our extraordinary network of accessible and convenient locations to
deliver new innovations, greater value, and better health outcomes in healthcare systems across the world,” Pessina said in the press release.

As part of this partnership, Walgreens will move the majority of its IT infrastructure onto Microsoft Azure, a cloud computing and artificial intelligence (AI) platform. Walgreens also will provide Microsoft 365 to more than 380,000 employees and stores located throughout the world. Microsoft 365 is a business solution which bundles Windows 10 and Office 365 with advanced security features.

Other Walgreens Collaborations That Provide Healthcare at Retail Locations

Walgreens also announced several collaborations with other companies to become more competitive and secure their share of the healthcare market.  

Through its partnership with Chicago-based VillageMD, a national provider of primary care clinics, Walgreens will open five primary care clinics next to Walgreens stores in the Houston area. These clinics, called “Village Medical at Walgreens,” will offer customers comprehensive primary care services, pharmacists, nurses, and social workers.


“This collaboration with VillageMD demonstrates our ongoing commitment to create neighborhood health destinations that bring affordable healthcare services to customers and provide a differentiated patient experience to the communities we serve,” stated Patrick Carroll, MD (above), Chief Medical Officer, Clinical Programs and Alliances, Walgreens, in a Walgreens press release. “VillageMD has a strong track record nationally of improving outcomes and reducing the cost of healthcare through their transformative primary care model.” (Photo copyright: Walgreens.)

Another collaboration involves Verily Life Sciences, a research arm of Alphabet Inc. (NASDAQ:GOOG), Google’s parent company. The agreement is for multiple projects to improve health outcomes for patients with chronic illnesses. The two companies will be exploring the use of technology, such as sensors, and software to help prevent, manage, screen, and diagnose disease with the ultimate goal of deploying those technologies at Walgreens retail locations. 

“The continued rise in chronic diseases today can be costly to patients as well as to our healthcare system,” Pessina told Business Wire. “Working with Verily, we’ll look at how we can best support integrated and value-based care to meet our patients’ needs, as well as opportunities to address other chronic conditions over time.”

Service Agreements with LabCorp and Quest

In 2018, Walgreens announced a significant expansion of their collaboration with LabCorp, to increase the number of patient service center (PCS) locations within Walgreens stores. The two companies agreed to open at least 600 additional LabCorp-at-Walgreens facilities across the US over the next four years. At the time of the announcement, LabCorp operated 17 facilities at Walgreens in Florida, Colorado, North Carolina, and Illinois.

Along the same lines, Quest Diagnostics (NYSE:DGX) also has opened hundreds of patient-serviced centers within various food and drug retail stores throughout the US, which Dark Daily reported in 2017.

“Healthcare is too complicated, too big, and if I can say, a little too messy,” Pessina told Digital Commerce 360. “We cannot be helpful to our patients if we don’t team up with many, many different, practically all, the players in this industry.”

CVS HealthHubs Offer Blood Testing, Health Screenings, and Other Services

To remain competitive, CVS also is trying new ways to capitalize on the growing healthcare market.

In February, CVS announced the creation of three newly designed stores in the Houston area as pilot projects. These stores, called HealthHubs, will include expanded health clinics with medical laboratories for blood testing and health screenings. They’ll also feature dieticians, respiratory specialists, and dedicated space to assist customers with the management of some chronic health conditions, as well as wellness rooms for yoga classes and health seminars.

“We’re pleased and surprised pleasantly with the ecosystem of healthcare that we’ve created here and how approachable it is, how much people are interested in it, and there are certain things we can take to all stores,” Kevin Hourican, Executive Vice President, CVS Health and President, CVS Pharmacy, told Becker’s Hospital Review

With more retailers adding an ever-increasing number of healthcare services to their offerings, the number of medical laboratory tests available at those locations will likely also increase. Although this trend may boost competition for clinical laboratories, it could also benefit them by creating new opportunities to provide value-added services to their clients.

—JP Schlingman

Related Information:

Microsoft, Walgreens Team up to Develop New Healthcare Delivery Models

Walgreens Boots Alliance and Microsoft Establish Strategic Partnership to Transform Health Care Delivery

CVS Unveils HealthHub Store Design

Walgreens and VillageMD to Offer Primary Care Services in the Houston Area

Walgreens Boots Alliance and Verily Announce Strategic Partnership to Innovate on New Solutions to Improve Health Outcomes

Walgreens and LabCorp to Open at Least 600 LabCorp at Walgreens Patient Service Centers

Walgreens Works with Microsoft to Design Digital Health Corners in Stores

UnitedHealth Group’s MedExpress and Walgreens Boots Alliance Initiate Pilot Program to Put Urgent Care Centers in Walgreens Pharmacies

CVS Announces Plans to Add More Clinical Services to Its Minute Clinic Locations, Including Certain Medical Laboratory Tests

Quest Diagnostics and LabCorp Ink Deals to Put Patient Services Centers in Grocery Stores and Retail Pharmacies, But Not for the Same Reasons as Theranos

Agreements to open PSCs in the nation’s largest retail grocery and pharmacy chain stores shows a willingness by clinical laboratories to attract customers through convenience

Greater use of retail stores as the location for patient services centers (PSCs) may be an important new trend for the clinical laboratory industry. That’s because, historically, medical laboratories placed most of their patient service centers in hospital campuses or near medical office buildings.

However, in recent months, both of the nation’s billion-dollar lab companies signed deals with national retailers to put patient service centers in their stores. Dark Daily believes that the motivation for a lab company to put a PSC into a grocery store or retail pharmacy is to make it easier and more convenient for a patient to get their specimen collected at a location that is closer to their home or office. In other words, it is faster for the patient to get to their nearest grocery store for a blood draw than to travel to the hospital campus in their community.

Various news reports indicate that Quest Diagnostics (Quest) may be more active than Laboratory Corporation of America (LabCorp) in opening PSCs in grocery stores and retail pharmacies. Over the last four months, Quest has announced plans to open patient services centers with several retailers, particularly in the states of Texas and Florida. Similarly, in the past four weeks, LabCorp disclosed an agreement with Walgreens Boots Alliance (Walgreens).

Ground zero for this current interest in putting PSCs into retail stories is Phoenix, Arizona. In 2014, to serve its direct-to-consumer lab testing business model, Theranos had PSCs in about 40 Walgreen’s pharmacies. Pathologists and clinical laboratories will recall that in November, 2015, Sonora Quest Laboratories of Phoenix opened a patient service center (PSC) in a Scottsdale, Ariz., supermarket owned by Safeway. It was the first PSC Sonora Quest had opened in collaboration with a grocery store chain, but it was not the last. Less than a year later, Sonora Quest and Safeway expanded their operations by opening additional PSCs in stores throughout the Grand Canyon State.

At the same time Sonora Quest was stepping into the retail blood-drawing business, Theranos of Palo Alto, Calif., was exiting it after opening 40 PSCs in Walgreens pharmacies, most of them in Arizona. However, before leaving the lab-testing business altogether, the embattled company put a lot of effort into educating consumers about the benefits of purchasing lab tests without a physician’s order. Theranos had even supported a bill (HB2645) the Arizona State Legislature passed that allowed patients to order tests without a physician’s requisition.

Now, in 2017, Quest Diagnostics (NYSE:DGX) appears interested in following a similar strategy as Theranos and Sonora Quest by developing Quest-branded PSCs in retail chain stores. On its website, Quest states that in the past several years it has opened 106 PSCs in Albertsons, Randalls, Safeway, Tom Thumb, and Vons retail stores in nine states.

Quest Moves to Open PSCs Across America

Quest has PSCs in the following states:

  • California (12 stores);
  • Colorado (27);
  • Delaware (1);
  • Maryland (9);
  • Montana (4);
  • Oregon (10);
  • Texas (26);
  • Virginia (7); and
  • Washington State (10).

This Quest patient service center operates within a Safeway store location. (Photo copyright: Quest Diagnostics.)

In June 2017, Quest announced it would open 10 additional PSCs in Tom Thumb retail stores in North Texas by the end of the month. Thom Thumb is a division of Albertsons, a food and drug retailer with stores nationwide. In the same announcement, Quest said it plans to open PSCs in 200 Albertson’s-owned stores nationwide by the end of the year.

Give Blood Then Shop

Also in June, Quest and Walmart (NYSE:WMT) announced a deal in which the two companies would open co-branded PSCs in 15 Walmart stores in Florida and Texas by the end of 2017.

In these locations, Quest encourages patients to have their blood drawn and then shop. Such locations can accommodate collecting specimens for routine blood work, such as total cholesterol and white blood cell count, as well as complex gene-based and molecular testing. Even patients with such chronic conditions as cancer, diabetes, and hepatitis, are encouraged to use these PSCs, the lab-testing company stated in the announcement.

Not to be outdone, LabCorp also announced a deal with Walgreens in June. In Forbes, Bruce Japsen reported that Walgreens (NASDAQ:WBA) announced it would collaborate with LabCorp (NYSE:LH) to develop and operate PSCs in Walgreens drugstores in Colorado, Illinois, and North Carolina.

The deal is the first for Walgreens since its troubled relationship with Theranos ended last year. Walgreens’ collaboration with LabCorp will initially begin this summer with five patient service centers in Denver and one in Morrisville, N.C. A seventh location in Deerfield, Ill., will open by the end of the year. Financial terms of the partnership were not disclosed.

Lessons Clinical Laboratories Learned with PSCs in Retail Stores

For Quest, the speed with which it is opening new PSCs is significant, because it seems to have taken lessons that Theranos and Sonora Quest learned earlier in Ariz. and applied them to markets nationwide. It’s worth noting that Safeway and Albertsons were already two of the largest retail grocery chains in the nation before they merged in 2015.

So, while Sonora Quest was working with Safeway, its parent company, Quest, was working with Albertsons.

One other point that is significant about Quest’s efforts is that not many other clinical laboratories have a presence in retail stores. It’s unknown just how much specimen volume these retail operations generate for Quest, one of the largest clinical lab companies in America. And, it is unknown if these PSCs in retail settings are breaking even or making a profit.

One result, however, is clear. That Quest is being so aggressive in opening PSCs testifies to the company’s level of interest in serving consumers directly. In other words, these PSCs are not primarily a direct-to-consumer play, but are aimed at building market share by adding regular lab testing done for patients. In this way, the direct-to-consumer business that Quest generates is a bonus.

The deals by Quest and LabCorp also imply that both clinical laboratory companies are willing to bet on the fact that consumers may prefer the convenience of using PSCs located in retail stores they currently frequent, rather than going to patient service centers in hospitals and sitting in a waiting rooms.

—Joseph Burns

Related Information:

Quest Diagnostics and Walmart Team Up to Expand Access to Healthcare Services

Walgreens Partners with LabCorp in New Diagnostic Testing Deal

Walgreens to Roll Out Urine, Blood Testing at Some Stores

Walgreens Partners with LabCorp on In-Store Lab Testing Services

Walmart and Quest Team Up for Lab Services

Quest’s Lab Services in New, Convenient Locations

You Can Now Get Lab Tests Done at Safeway Stores – from Theranos’ Rival

More Medical Laboratory Testing Expected as Retail Clinics Change Delivery of Routine Healthcare Services

As popularity of retail clinics grows among consumers, so does the likelihood of increased clinical pathology laboratory testing at these locations

Retail clinics (RC)—often called “rapid clinics”—are growing at a phenomenal rate. At the same time, more hospitals and health systems are deciding to participate in this growing trend, either by owning and operating such retail clinics in their communities or by providing the clinical staff.

Since the inception of this new care delivery model about six years ago, Dark Daily has predicted that consumers will support rapid clinics located in certain retail settings. Events to date bear this out. For that reason, pathologists and clinical laboratory managers should expect to see, over time, a steady increase in the menu of diagnostic testing offered by retail clinics.
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Consumer Demand for Convenient, Low-Cost Medical Care Moves Hospitals Into Retail Clinic Business

Hospitals Opening Retail Clinics to Capture Greater Market Share Walk-in rapid medical clinics in retail stores are so popular with consumers that now hospitals want in on the action. Some of the nation’s most famous hospitals have inked agreements to put their brand on rapid clinics located inside many of the country’s largest retail and pharmacy chains. Hospital-branded rapid clinics are inside 25 Wal-Mart stores nationally, according to a New York Times article. Additionally, Cleveland...

Americans Are Using Convenient Care Clinics in Retail Settings

Retail care clinics-typically a nurse practitioner offering fast patient access to a limited number of clinical services in a pharmacy or other type of retail store-are now an accepted part of the provider mix in the United States. At least two studies published by credible organizations consider retail care clinics, also called convenient care clinics, to be an important source of care.

One study was released by the Center for Studying Health System Change, based in Washington, DC. Using data from the Health Tracking Study funded by the Robert Wood Johnson Foundation which included 18,000 telephone interviews, this study looked at the use of retail care clinics. It stated that 1.2% of American families reported visiting a retail care clinic in the past 12 months. By contrast, 2.3% of American families said that they have used a retail care clinic in recent years.

What Dark Daily found notable about this study is another finding by researchers. Uninsured families represent 27% of the users of retail care clinics, and the slowdown in the number of new convenient care clinics opening may inhibit access to care through this channel. “If the growth of retail clinics falters, underserved groups already facing access pressures may suffer from the loss of alternate sources of care more than the rest of the population,” stated researchers in the study.

This is an interesting turn of affairs. Dark Daily readers may recall that, several years ago, in the early days of the convenient care clinic movement, the business model of a nurse practitioner and a limited menu of clinical services providing care in a retail store came under plenty of criticism. Now, some healthcare researchers are acknowledging that retail care clinics do provide useful clinical services, at an affordable price, that benefit the uninsured.

The second study, released by the Deloitte Center for Health Solutions, conducted an on-line poll of 3,000 adults in a nationally-representative sample and found that 16% reported that they had used a convenient care clinic located in a retail store. Interestingly, 17% of the uninsured and 11% of the Medicare enrollees in this survey had visited a retail care clinic. At a minimum, the survey results demonstrate that a significant portion of the American public is aware of these in-store clinics and is willing to use them.

Optimistic predictions that there would be 10,000 retail care clinics by 2010 will not come true. Starting in 2006, there were 60 retail care clinics in 18 states. The Convenient Care Association says the number of such clinics in the United States now totals approximately 1,150 retail care clinics in 38 states.

However, despite the slowdown in the rate at which new convenient care clinics are opening, this service delivery model seems to have established itself as a permanent fixture in the American healthcare system. Last summer, Dark Daily reported that Wal-Mart was introducing telemedicine access to a physician at the retail care clinics it operates in multiple Wal-Mart locations in Houston, Texas

Dark Daily believes that, as demonstrated by the telemedicine example at Wal-Mart’s convenient care clinics in Houston, there will be a steady expansion in the range of clinical services offered at these sites. It is highly likely that laboratory testing will be needed to support these additional clinical services. As that happens, these retail clinics will become both a threat and an opportunity for the nation’s laboratories.

Related Information:

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