KROGER HEALTH PRESIDENT TALKS ‘FOOD AS MEDICINE,’ PRESCRIPTION DRUG PRICES

https://www.healthleadersmedia.com/finance/kroger-health-president-talks-food-medicine-prescription-drug-prices

Colleen Lindholz, president of Kroger Health, spoke about the grocery store’s plans to expand further into healthcare.


KEY TAKEAWAYS

Kroger is look to assist customers who have issues with the accessibility and affordability of prescription drugs.

To that end, the Cincinnati-based grocery store giant launched a pharmacy savings club in partnership with GoodRx last December.

Lindholz also impressed the need to incorporate ‘food as medicine’ into the company’s healthcare plans.

Cincinnati-based grocery and retail giant Kroger Co. has ambitions to continue its healthcare expansion mission, according to Colleen Lindholz, president of Kroger Health.

Kroger is one of the largest grocery stores and retail companies in the country, with about 2,300 pharmacies and 221 retail clinics, offering it a sizable footprint to compete in healthcare. Lindholz has been with the company for more than two decades and has helped craft its business strategy focused on health and wellness.

“Our vision is to help people live healthier lives, and our mission statement states that we’re going to simplify healthcare by creating solutions that combine health, wellness, and nutrition to connect with people on a personal level,” Lindholz told HealthLeaders.

From Lindholz’s perspective, there are several opportunities for Kroger to grow in healthcare, most notably through improving prescription drug delivery in a way that benefits consumers and focuses on promoting ‘food as medicine.’ However, she also spoke to the lingering challenges Kroger faces, including industry consolidation, difficult negotiations with pharmacy benefit managers (PBM), and rising direct and indirect remuneration (DIR) fees.

Below are some takeaways from Lindholz on what lies ahead for Kroger in the healthcare sphere.

MANEUVERING PBMS AND DIR FEES

Lindholz said that Kroger, like other healthcare players, is subject to the pressures produced by widespread vertical integration and consolidation. Kroger’s strategy to drive prescriptions into its stores has been affected by the fact that it contracts with multiple PBMs, the major ones being owned by large health plans.

“We’re seeing a lot of pressure as far as reimbursements are concerned and DIR fees, which are escalating out of control,” Lindholz said. “I know there’s some activity going on in Washington right now with a call for DIR reform and where should most of the cost reduction be.”

Lindholz added that Kroger remains a supporter of the concept of DIR fees, citing the purpose for their initial creation as a way to provide a higher quality of care for patients.

“However, we are getting hit with DIR fees that are 300% ahead of where we were in 2016,” Lindholz said.

PBMs also compound the problem for Kroger, according to Lindholz, since they act as a negotiator with the drugmakers but ultimately set the standards for how rebates are passed through to pharmacies.

“The way that they measure us and the way that we compete to get those rebates back, where 2,300 pharmacies are compared to an independent that has five pharmacies, is crazy,” Lindholz said. “I think the way that they’re measuring it is all for their gain, not necessarily for the patient’s gain. We want the lowest cost to be at the point of sale where the patient actually is.”

‘FOOD AS MEDICINE’

A key component to addressing chronic disease is addressing what people eat, Lindholz said. Kroger introduced its free “OptUp” app in an attempt to correct some of the root problems that contribute to chronic disease.

In 2017, Kroger conducted a study to analyze A1Cs, the average blood sugar over 90 days, and blood pressure in diabetic employees and leverage nutritional science to assist them in making food purchasing decisions.

Kroger was so encouraged by the results of the study that it had nutrition and technology experts at the company design an app driven by the Kroger loyalty card  as a way to “simplify Kroger customers’ ability to shop for healthier foods.”

“The results were so statistically significant that we decided to bring the app to the market because we believe that over time it can sustain behavior change,” Lindholz said. “What we’re trying to do is be in the prevention space, specifically around diabetes, where we’re helping our diabetics make those food choices that they critically need in order to keep from progressing with their disease and going from two oral medications onto insulin.”

A spokesperson from Kroger said the company will soon be rolling out an update to the app to allow customers the ability to shop for healthier foods, even if they do not shop at Kroger.

Lindholz also commented that healthcare is a fragmented industry, citing the lack of communication between different electronic medical records (EMR) systems.

Lindholz said the company sought to create a solution to foster a better line of communication with systems that run on Epic and Cerner.

“We’re building a platform that we’re going to be able to see across all of our pharmacies and will connect with the top 17 EMRs in the country,” Lindholz said. “It’s important in our quest to go after the triple aim and to decrease some of this fragmentation while closing gaps in care.”

“One of the unique pieces of that new platform is that it will be the first time that anyone’s ever included a food score. We’re going to test in Cincinnati with a cardiologist and an endocrinologist around getting to look at how customers eat, if we can help change their behavior, and will their overall outcomes be better over time?”

TACKLING PRESCRIPTION DRUG PRICES

Given Lindholz’s background as a pharmacist, it should come as no surprise that one of her major initiatives at Kroger is improving the availability and affordability of prescription drugs for customers. To that end, Lindholz noted that Kroger currently has three central prescription fill facilities around the country that fill prescriptions overnight so Kroger can have the lowest cost to fill.

“This allows us to spend more time with the patients that are in the store and deliver the highest quality of care that we can at the lowest cost,” Lindholz said. “We’re doing a lot more one-on-one counseling with customers, both at the counter and also through a center of excellence that we have. We’re up 320% in clinical interventions versus a year ago and that is due to us putting a system in place that queued up pharmacists at the time either when they’re with patients at the store or through our call center.”

Kroger also launched a pharmacy savings club in partnership with GoodRx last December to assist customers dealing with high prices and limited access to prescription drugs.

“What that club does is it brings transparency and pricing directly to the customer. It costs $36 for an individual, $72 for a family, and we are delivering a significant amount of savings to the consumer,” Lindholz said. “What we’re doing with the savings club is cutting out the middleman. We’re taking all the rebates that we would get from the manufacturers and passing them directly down to our customers, which is saving them a whole lot of money.”

 

 

 

WHY HEALTH SYSTEMS SHOULD WORRY ABOUT WALGREENS AND CVS

https://www.healthleadersmedia.com/strategy/why-health-systems-should-worry-about-walgreens-and-cvs

 

There’s a building threat from the nation’s two retail drugstore giants to hospitals and health systems as providers move toward value-based care and lower-cost outpatient services.

Even with Amazon threatening to compete with retail drugstore chains CVS Health and Walgreens with its own online pharmacy, these retailers aren’t giving up on brick-and-mortar as a way to attract more patients into their stores.

And that’s bad news for the nation’s hospitals and health systems.

There’s a building threat from the nation’s two retail drugstore giants to hospitals and health systems as medical care providers move away from fee-for-service medicine to value-based care and lower-cost outpatient services.

Walgreens and CVS are looking to healthcare as a way to keep customers coming into their stores, particularly in an era where consumers are fleeing brick-and-mortar to shop online via Amazon.

As front-end retail sales have fallen in recent years, CVS and Walgreens are moving more rapidly into healthcare from simply their historic role of filling prescriptions beyond the pharmacy counter and treating routine maladies with nurse practitioners in their retail centers to more services.

They are partnering more closely with health insurance companies that will work harder to funnel more patients to outpatient healthcare services inside the stores that will make them direct competitors of U.S. hospitals and health systems.

CVS has more than 1,100 retail MinuteClinics compared to 800 five years ago and 400 a decade ago.

CVS was opening 100 clinics per year 10 years ago, and that has slowed because they are now focusing on expanding healthcare services in the clinics as well as their stores generally. The same goes for Walgreens.

Walgreens has increased the services in its retail clinics, advertising the ability of nurse practitioners to conduct routine exams and student physicals and has been aggressively lobbying states across the country to change scope-of-practice laws to allow pharmacists to administer an array of vaccines.

“Why not use those locations as a strategy for healthcare?” Walgreens Chief Medical Officer Dr. Patrick Carroll says of the drugstore chain’s nearly 10,000 locations across the country. “We have the space. We should use it.”

To be sure, Walgreens is looking to provide more physician services like x-rays and procedures by partnering with UnitedHealth Group’s Optum to connect its MedExpress brand urgent care centers to an adjacent Walgreens. Like most retailers, Walgreens’ sales of general merchandise in the front end of the store is falling just as pharmacy sales, personal healthcare, and wellness revenues rise.

In the first such ventures, the Walgreens store and the MedExpress center each have their own entrance with a door inside connecting the urgent care center with the drugstore. It’s designed for a medical provider to guide a patient to either facility depending on their prescription or other needs.

For now, there are 15 locations in six states that have MedExpress urgent care centers connected to Walgreens stores as part of the pilot. The markets include Las Vegas; Dallas; Minneapolis; Omaha, Nebraska; two cities in West Virginia; and Martinsville, Virginia.

“We’re working closely with a number of partners in the healthcare community to bring services closer to our customers,” Carroll said. “With our stores serving as more of a neighborhood health destination, we can best meet the changing needs of our customers, while also complementing our expanded pharmacy services.”

Meanwhile, CVS plans to offer more healthcare services inside its stores after its merger with Aetna closes. CVS executives say they aren’t ruling out developing urgent care centers as well.

CVS’ network of nearly 10,000 pharmacies and over 1,000 retail clinics, and Optum’s growing network of ambulatory facilities like the MedExpress urgent care centers are emerging as a model health insurers want to do business with as fee-for-service medicine gives way to value-based care that keeps patients out of the hospital.

And in CVS’ case, the pharmacy will soon own Aetna, a health plan with more than 20 million members. That combination, which is currently wending its way through the regulatory process, is expected to lead to more narrow network health plans that encourage patients to use providers in the Aetna-CVS network over other health systems’ facilities.

Health systems should be concerned, healthcare analysts say.

“CVS and Aetna, in their own words, are promising to reinvent the front door of American healthcare,” says Kenneth Kaufman, managing director and chair of the consulting firm Kaufman Hall. “That promise should be of serious concern for legacy hospital providers since those providers have occupied that front door for the past 75 years.”

CVS Health President and CEO Larry Merlo is beginning to offer some details to their strategies.

While cautioning that it’s “very early” in the development of new programs the combined company will develop, Merlo has said the larger company plans to first focus on three primary patient populations: those patients with any of five chronic diseases: diabetes, hypertension, hyperlipidemia, asthma, and depression.

CVS and Aetna will also focus on “patients undergoing transitions in care,” and a third “broader focus on managing high-risk patients,” Merlo told analysts on the company’s second quarter earnings call in May.

“By extending our new health care model more broadly in the marketplace, patients will benefit from earlier interventions and better connected care leading to improved health outcomes,” Merlo said on September 20 at a CVS Health town hall meeting in Los Angeles.

“Think again about that senior leaving the hospital, knowing that the care plan prescribed by her doctor is being seamlessly coordinated by CVS and her caregiver. By fully integrating Aetna’s medical information and analytics with CVS Health’s pharmacy data and our 10,000 community locations, we can enable more effective treatment of the whole patient,” he says.

 

Anthem partners with Walmart to expand access to over-the-counter drugs

https://www.fiercehealthcare.com/payer/anthem-walmart-over-counter-medicine-medicare-advantage-retail?mkt_tok=eyJpIjoiTjJRMlpERTBObU0yWldOaiIsInQiOiJPMDVjRGNQVzcxMjIzOGt1ZTZva0R2YU1PXC9mYkczVEtYVHNHWmZzSHc1TjU1RGRZZ1o4VVprZStEV3R3VWdXWFwvQlRoYVg4cGpzakZIOFFkMkthRnVPbVwvNEUwQ3ptOVozRGQ0U3IyVDFENENmZTErMjc3TDhRYlwvaUlrT1oxSWgifQ%3D%3D&mrkid=959610

Walmart sign

Anthem has entered a new partnership with retail giant Walmart to offer members access to over-the-counter (OTC) medications.

Beginning in January, Anthem’s Medicare Advantage members will be able to use OTC plan allowances to purchase medications and other supplies such as support braces and pain relievers, the two companies announced on Monday.

Previously, MA beneficiaries with OTC allowances could purchase medications through a catalog or by calling a designated number. Some members were provided a card they could use at a limited set of retail stores.

The new partnership significantly expands access to OTC drugs and supplies by allowing members to make purchases at any of Walmart’s 4,700 locations. 

“The program with Walmart will allow consumers to pick the shopping method that best fits their lifestyle and the initiative is expected to significantly reduce the out-of-pocket cost burden for those enrolled in Anthem’s affiliated MA health plan,” Anthem spokesperson Hieu Nguyen said in an email.

Walmart says 90% of Americans live within 10 miles of a Walmart. The partnership will also give members access to free two-day shipping on orders $35 or more.

“We believe that programs like this can make a tremendous difference for healthcare consumers who often live on a fixed income or are managing chronic medical conditions,” Felicia Norwood, executive vice president and president of Anthem’s Government Business Division, said in a statement. Sean Slovenski, senior vice president of health and wellness at Walmart, said the company is “thrilled to be working with Anthem to provide its Medicare Advantage members with convenient access to our broad assortment of high-quality over-the-counter products.”

Interestingly, the partnership comes months after Walmart was reportedly considering an acquisition of Humana. Slovenski, the former vice president of innovation at Humana, joined Walmart last month. 

 

Walgreens just filed a $140 million lawsuit against Theranos

http://www.businessinsider.com/walgreens-files-lawsuit-against-theranos-2016-11?nr_email_referer=1&utm_source=Sailthru&utm_medium=email&utm_content=ScienceSelect&pt=385758&ct=Sailthru_BI_Newsletters&mt=8&utm_campaign=BI%20Science%202016-11-08&utm_term=Science%20Select%20-%20Engaged%2C%20Active%2C%20Passive%2C%20Disengaged

Elizabeth Holmes

Walgreens has filed a breach of contract lawsuit against Theranos, the embattled blood-testing startup.

The lawsuit was filed Tuesday in Delaware’s district court. Details on Walgreen’s complaint weren’t immediately available because the suit was sealed by the court.

The Wall Street Journal is reporting that Walgreens is looking for $140 million in damages, claiming that Theranos misled Walgreens about how far along its blood-testing technology was when the original partnership was inked.

Walgreens, once Theranos’ biggest partner, terminated its relationship with the company in June. It had operated Theranos Wellness Centers, where people could go have their blood tested in the company’s stores.

CVS Health to cut 600 corporate jobs

http://www.healthcaredive.com/news/cvs-health-to-cut-600-corporate-jobs-1/429798/

CVS Health employs more than 240,000 people in the U.S., many of whom work in retail positions or as pharmacists at its 9,600 pharmacies. But with increased competition in the drugstore retail space, CVS Health is starting to let some of those positions go.

Recently, the retailer has been buffeted by the likes of Walgreens, Rite Aid, and Wal-Mart Stores jockeying for sales of medications and health care services. Today’s drugstores compete with doctors and healthcare clinics as well as with retailers like Sephora and Ulta in beauty, and of course, general merchandisers like Target and, increasingly, Amazon, in consumer goods. The retailer may also be wary of the proposed merger between rivals Walgreens and Rite Aid.

An uptick in lower-priced generic pharmacy sales and a decline in store traffic muted CVS Health in its previous quarter. Sales grew 2.1% in Q2, missing analyst expectations for a 2.5% rise and trailing well behind the 4.2% increase that CVS posted in the first quarter of this year. Non-pharmacy same-store sales fell 2.5% in Q2, the company added. The drugstore retailer is due to release its third quarter results next week.

While the Affordable Care Act has expanded some opportunities for drugstore retailers to offer more medical services, the law has also helped lower some healthcare costs, as it was intended to do, which could hit retail sales. CVS also left a lot of money on the table when it ceased sales of tobacco products two years ago.

Rite Aid opened 23 clinics in 2015, earned $30 billion as Walgreens takeover nears

http://www.healthcarefinancenews.com/news/rite-aid-opened-23-clinics-2015-earned-30-billion-walgreens-takeover-nears

The results are just the latest example of how retail healthcare is growing as a real competitor for traditional healthcare providers.

M&A Roundup: Ascension to Acquire Wheaton Franciscan Health, Walgreens Buying Rite Aid

http://healthleadersmedia.com/page-1/HEP-322245/MA-Roundup-Ascension-to-Acquire-Wheaton-Franciscan-Health-Walgreens-Buying-Rite-Aid

"As you know we've made a lot of acquisitions lately, and the last one we made seems to have resulted in us buying ourselves."

The Wheaton acquisition strengthens Ascension’s market share in Wisconsin. Meanwhile, federal antitrust scrutiny of the Walgreens-Rite Aid combination is likely to come down to a city-by-city review.