Walgreens expands its medical-care offerings in major California markets

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Walgreens is opening more Health Corner locations through a deal with Blue Shield of California. At the dedicated spaces, it can provide medical care that’s billed to the insurer.
Blue Shield of California

At Walgreens stores in California, the drugstore chain is previewing how it plans to become a place where more customers go for medical care — not just prescriptions.

Walgreens Boots Alliance said Wednesday that it will expand the number of stores in the San Francisco and Los Angeles areas with a Health Corner, which offers medical care, through a deal with health insurer Blue Shield of California. It has opened 12 Health Corner locations in California and plans to open 8 more by the middle of the year.

Health Corners are new spaces inside of stores where a registered nurse or pharmacist can schedule a mammogram, screen a patient for high blood pressure or diabetes or help set up or fix a high-tech medical device.

Dr. Sashi Moodley, chief clinical officer of Walgreens Health, said the dedicated spaces act as “connective tissue that are keeping these patients on track, especially when they’re between doctor’s visits.”

Walgreens has about 9,000 stores across the country. Moodley said it is opening the Health Corners in “health care deserts” with few nearby doctor’s offices and high levels of patients with chronic conditions like diabetes.

So far, Walgreens has opened a total of 48 Health Corner locations. That includes 12 so far in California. It has opened 36 in New Jersey, where it has a deal with Clover Health. It plans to have more than 100 Health Corner locations by the end of 2022.

Walgreens declined to share financial terms or the length of the deals.

The expansion with the insurer is one piece of the company’s strategy to push into health care, as companies from Amazon to Capsule steal away sales of shampoo, pain relievers, prescriptions and more from traditional drugstores.

Walgreens has made several acquisitions, including becoming the majority owner of VillageMD, a primary care company. VillageMD is opening doctor’s offices that are connected to Walgreens stores. It is also opening robot-powered fulfillment centers across the country, which help fill prescriptions and free up pharmacists’ time to provide more medical care.

Its competitor, CVS Health, is also turning more of its stores into health care destinations by adding more services and medical devices and expanding a new store format called a HealthHub. It owns health insurer Aetna and directs members to MinuteClinic locations, which are inside of stores.

The Walgreens deal is appealing because of its many store locations, D.D. Johnice, vice president of the Health Transformation Lab at Blue Shield of California, said in a news release. She said it will “make these resources available closer to home and to offer more satisfying and convenient support to our members and their families.”

Each Health Corner location is staffed by a Walgreens pharmacist or a nurse. Each includes a private room and a “tech bar,” Moodley said.

Blue Shield reimburses billable services that the health advisor provides to its members. Customers who aren’t covered by the insurer can also get select services from a Health Corner. For Blue Shield members, there’s a longer list of available health services and no copay.

Moodley said Walgreens can drive down health care costs for insurers by interacting with patients more frequently at the Health Corner locations. Nearly 80% of the U.S. population lives within five miles of a Walgreens store. Many of its regular customers are seniors, caretakers and people who juggle multiple medical conditions, which means they often see their pharmacist more than their doctor as they retrieve prescriptions, he said.

“You can only impact patients that you can engage and that’s a critical reason why we think we’re so well-positioned,” he said.

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