|THIS WEEK IN HEALTHCARE
What happened in healthcare this week—and what we think about it.
More boosters approved as the pandemic continues to ebb
Today a Food and Drug Administration (FDA) advisory panel voted unanimously to recommend a second shot of Johnson & Johnson’s (J&J) COVID vaccine for people over the age of 18 who received their first J&J shot at least two months ago. The move came a day after the panel also voted to approve boosters for Moderna vaccine recipients, following the same criteria it used earlier to approve use of a booster for the Pfizer-BioNTech shot. The booster recommendations must now be endorsed by the FDA, and then a Centers for Disease Control and Prevention (CDC) panel will make its recommendations for booster rollout, likely next week. FDA officials said they would also consider a mix-and-match approach for those who received the J&J, pointing to new evidence that Pfizer and Moderna shots are very effective in boosting immunity in those previously vaccinated with the J&J vaccine. Some 77 percent of eligible Americans have now received at least one vaccine dose, according to the CDC, and in a press conference this week, Biden administration officials said that the number of unvaccinated Americans had declined from 97M to 66M since the President first announced vaccine mandates in late July. Meanwhile, COVID numbers continue to trend in a positive direction: over the past week, new cases are down more than 12 percent, test positivity rates are down 4 percent, and hospitalizations are down 8 percent. While an alarming average of 1,434 Americans have died each day over the past week, that average is down 13 percent from a week ago. More boosters, more vaccines, fewer cases, hospitalizations, and deaths—we are continuing to see the Delta wave ebb, and the prospect for a more normal holiday season lies ahead. Now let’s hope there are toys on the shelves, and that prices aren’t too high.
Walgreens Health takes shape with big new investments
Pharmacy retailer Walgreens announced two moves on Thursday that will position the company to join competitor CVS Health as a major player in the healthcare delivery space. First, expanding a venture started in 2019, the company agreed to invest $5.2B in value-based primary care provider VillageMD, increasing its ownership stake from 30 percent to 63 percent. VillageMD operates Village Medical clinics at 52 of Walgreens’ 9,000 locations, with plans to open another 33 by the end of this year. In making its initial investment in the company last year, Walgreens announced plans to open between 500 and 700 clinics before 2025, and 1,000 by 2027; the new investment presumably gives Walgreens more control over the pace of that rollout. Village Medical clinics are staffed by VillageMD primary care physicians and other clinical personnel, and accept multiple insurance plans, as well as caring for cash-paying patients. The clinics typically take up about a quarter of the space in a Walgreens store, and are designed to care for 100 to 120 patients per day. Walgreens has targeted care for patients’ chronic conditions as a key area of focus, leveraging linkages between the clinics and the company’s pharmacy operations. Given the scale of Walgreens’ national operation—75 percent of Americans live within 5 miles of a store—the VillageMD partnership has the potential to make Walgreens a major provider of primary care services across the country, positioning it as yet another major “disruptor” targeting incumbent healthcare players (provided they can find the clinician manpower to staff up).
During an investor call Thursday, Walgreens executives said that VillageMD would become part of a new business segment called “Walgreens Health”, which will also include home health benefits management company CareCentrix. A $330M investment in CareCentrix was also announced this week, giving Walgreens a 55 percent ownership stake, with the option to purchase the rest of the company later. Walgreens plans to leverage the company to manage the transition of patients from inpatient to home-based settings, while more tightly integrating pharmacy management into patient care. Last month, Walgreens also increased its ownership stake in Shields Health Solutions, with a $970M investment that gave it a 71 percent ownership stake in the company, which works with hospital systems to handle specialty pharmacy care. With all these recent investments, and the repositioning of care services into a separate business segment, Walgreens is clearly stepping up its efforts to manage patient care across the continuum, bringing its consumer engagement and convenience care capabilities to bear as it vies for a growing share of the healthcare dollar.
Best Buy to acquire digital health company Current Health
On Tuesday, electronics retailer Best Buy announced plans to acquire digital health company Current Health, adding to its portfolio of home-based care services targeted toward seniors. Founded in Scotland in 2015, Current Health aims to connect remote monitoring, telemedicine and patient engagement capabilities in a single, home-based platform. The company has a growing US presence, working with health systems including PA-based Geisinger, and Mount Sinai Health System in New York. This deal builds on Best Buy’s 2018 acquisition of GreatCall, whose services included home telemonitoring and the senior-friendly Jitterbug cell phones. Best Buy is banking that its Geek Squad workforce, already welcomed into consumers’ homes to set up WiFi and troubleshoot computer issues, can be leveraged as a “last mile” strategy to deploy its growing portfolio of remote monitoring, communication and care management technology. While it remains to be seen whether the company will figure out how to scale, integrate and profit from their expanding healthcare services, they will likely find an increasing number of partners among health systems and insurers looking for a digital and home care solution for their Medicare Advantage populations. And if they are successful, the company’s evolution from a big-box electronics retailer to an enabler of home healthcare solutions would be one of the more compelling corporate transformations on record.