Obamacare Will Bring Changes -- and Walgreens Wants 'To Fill the Void'

by Dan Diamond, California Healthline Contributing Editor

Two-hundred-and-fifty-nine organizations have been named Medicare accountable care organizations. Most were formed by hospitals. Some were launched by physician groups.

And three were created by a pharmacy chain.

Walgreens' move into shared savings is many things: unusual, eye-catching, a sign of the times.

But it's not surprising, observers say, as the pharmacy chain has been cultivating a broader strategy to ramp up its role in frontline care. And through a handful of new programs, Walgreens already has "demonstrated ... the valuable role our pharmacists can play working with physicians to meet the triple aim" of improving patient outcomes and satisfaction while cutting health costs, spokesperson Jim Cohn told California Healthline.

"ACOs are the next step."

Pharmacists' Role in Care Provision

Of course, "next step" implies there was a first step, and Walgreens' path toward frontline health services began in 2006, when the chain launched its first in-store health clinics, staffed by nurse practitioners who treated walk-in patients for the common cold and other ailments. Walgreens now has more than 700 of these clinics.

Walgreens subsequently began redesigning its stores to bring pharmacists out from behind the counter to sit at open desks and offer medication consults. Last year, Walgreens launched WellTransitions, a program designed to reduce hospitals' readmissions rates by sending medication lists to a patient's primary care provider, performing medication reviews for partner health systems and delivering other services related to drug therapy.

Meanwhile, the perception of pharmacists has been changing -- partly because of Walgreens' efforts, partly because of underlying changes in health care.

Increasingly, pharmacists are being deployed at the point of care at integrated health systems like Kaiser Permanente, to perform medication therapy management -- assessing a patient's current drugs and interactions -- and personalize a medication care plan.

While pharmacists working at a retail chain have a different set of responsibilities, these "pharmacists are perfectly positioned to help address the drug 'adherence' problem," Michelle Andrews wrote for Kaiser Health News/Los Angeles Times in 2011. "Research shows that only about half of people take their medications as prescribed," which leads to higher costs and complications, Andrews noted. And pharmacists are capable of providing reminders, through their frequent patient interactions.

Mechanics of the New ACOs

But for all of their advancements in supporting care delivery, pharmacists can't offer diagnoses or actually prescribe medicine. And they are not recognized as providers under current law.

(The National Community Pharmacists Association and the National Association of Chain Drug Stores just this week lobbied federal officials to "expand the role of pharmacists in the various new innovative programs" supported by the Affordable Care Act, including ACOs, and specifically to "gran[t] pharmacists provider status for the purpose of participating in Innovation Center projects.")

Given these limitations, Walgreens -- which was eying opportunities to have a foothold in the ACA's shared savings program -- needed partners to actually launch its ACOs.

The chain will partner with a physician group in New Jersey to create Advocare Walgreens Well Network and a Florida-based clinic to launch the Diagnostic Clinic Walgreens Well Network. The company also has teamed up with a Texas-based health system to launch Scott & White Healthcare Walgreens Well Network.

The new ACOs will draw on Walgreens' accessibility: Unlike doctors' offices, the chain's pharmacies are open every day of the year and some of its locations are around-the-clock. Walgreens locations also can provide basic services "such as transitions of care, medication adherence management, immunizations, [and] health screenings," Cohn told California Healthline.

"Some of the things we're looking at include information relevant to a patient's treatment and medical condition," he added. "That will be stored electronically on a secure platform, allowing health care providers and medical staff more visibility to help create care plans for patients."

"The way I like to describe it is as a physician-led plan where we're an active partner," Walgreens Senior Vice President Jeffrey Kang, who leads the chain's ACO efforts, told the Washington Post's Sarah Kliff. "They're the quarterback who creates the treatment plan. We can be care extenders who help implement and execute the plan."

Underlying Market Economics

It's telling that most of Walgreens' coordinated-care efforts, to this point, haven't been expected to produce much revenue for the chain. And given the ACA's restrictions, it's still unclear how or if pharmacists can be financial participants in ACOs, although Cohn told Pharmacy Today that "Walgreens as a whole will be participating in the savings."

So why is Walgreens getting into this new market?

There's some speculation that it wants to move away from traditional retail pharmacy distribution. And the chain had an occasionally difficult 2012. In one troubled period, its haggling with Express Scripts, one of the nation's largest pharmacy benefit managers, prompted Express Scripts to send its customers to CVS and other Walgreens' competitors for nine months. One Chicago business writer called the episode the "worst corporate blunder of the year." However, the firm's prospects have rebounded; a handful of analysts have touted its stock and, as of press time on Wednesday, Walgreens is trading at an 18-month high.

Regardless, the Affordable Care Act means that there will be new opportunities for the chain to participate in the nation's health system.

"With nearly 70 percent of the U.S. population either without a primary care physician or not utilizing one, and more than 30 million people gaining insurance coverage in 2014 under health care reform, we are well-positioned to fill the void in care," Walgreens President and CEO Greg Wasson said at last month's shareholders meeting.

And Walgreens' three ACOs may just be the starting point.

"We will be looking to expand and form future ACO relationships," Cohn told California Healthline.

Here's what else is happening around the nation.

Administration Actions

  • The Obama administration has missed the deadline for implementing several Affordable Care Act provisions, as it focuses on meeting the law's requirements for the health insurance exchanges and the Medicaid expansion. Some of the provisions scheduled to take effect Jan. 1 would increase reimbursements for primary care physicians who treat Medicaid beneficiaries, change how hospitals and physicians are paid through Medicare and boost federal funding for states that eliminate copayments for preventive care (Galewitz, Kaiser Health News/MedPage Today, 2/2).

Eye on the Exchanges

  • Last week, HHS officials said that federally run health insurance exchanges are on schedule for October enrollment. Gary Cohen -- director of the Center for Consumer Information and Insurance Oversight, which is charged with leading the majority of the ACA's implementation effort -- said the government is on track to start accepting insurance plan applications in April, and it is testing a data hub designed to confirm the eligibility of people seeking insurance in any of the federal exchanges (Baker, "Healthwatch," The Hill, 1/31).

Inside the Industry

  • Lawmakers and interest groups are seeking clarity on the guidelines and rewards for workplace wellness programs under the ACA. Some House Democrats -- led by Rep. Henry Waxman (Calif.) -- in a letter to the Obama administration said that although the rule establishes requirements for how a wellness program must be designed, those requirements are not based on science. The National Committee on Quality Assurance recommended in its letter that its Wellness and Health Promotion Accreditation program be used to establish a better definition of reasonable program design (Zigmond, Modern Healthcare, 1/29).
  • In a letter sent last week to Reps. Phil Roe (R-Tenn.) and Alyson Schwartz (D-Pa.), the Alliance of Specialty Medicine -- a coalition of groups representing specialists, including brain surgeons, plastic surgeons and heart doctors -- said it supports a bill (HR 351) to repeal the Independent Payment Advisory Board created by the ACA. The coalition said that "[s]ignificant health care decisions must not be made by a group of unelected, unaccountable individuals with little or no clinical expertise or the oversight required to protect access to care for America's seniors" (Baker, "Healthwatch," The Hill, 1/29).

In the States

  • On Monday, Ohio Gov. John Kasich (R) announced that his state will participate in the Medicaid expansion (Palmer, Reuters, 2/4). Kasich said the state expects to receive about $2.4 billion in federal funding over the next two years for the expansion, which is expected to extend Medicaid benefits to about 366,000 eligible residents (Sanner, AP/Washington Times, 2/4). Kasich's plan includes an "opt out" clause that would allow the state to back out of the expansion if the government fails to fulfill its funding commitments (Viebeck, "Healthwatch," The Hill, 2/4).
  • Hospitals in South Carolina have offered to contribute to the costs of expanding the state's Medicaid program through an additional "provider tax." If the state moves forward with expanding Medicaid, hospitals would benefit from an influx federal Medicaid funding. Gov. Nikki Haley (R) said she does not support the provider tax because it would be passed on to patients (Beam, Columbia State, 1/30).

Rolling Out Reform


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