Walgreens partners with health care provider for 25 in-store clinics

Walgreens Boots Alliance (NASDAQ:WBA) announced a partnership with Providence Health & Services to open 25 new clinics in Washington and Oregon. The clinics will be owned and operated by Providence, a first for Walgreens which independently runs 400 clinics.

The partnership signifies the first time that Walgreens is outsourcing its retail clinics to a traditional health care operator, reported Crain's.

"We still see value in our original clinic model and we plan to continue operating clinics under the existing structure," Jim Cohn, a Walgreens spokesman, told Crain's.

The partnership is meant to improve communications between retail clinics, the patient and the primary care doctor because all records will be on the same electronic system. Currently hospitals and doctor offices use a separate system than the records kept at Walgreens. Under the current system, Walgreens' clinics have to send secured faxes or email to patients' primary care physicians.

For the health system, there is the added benefits of expanded hours for patients and an alternative to an emergency room visit. Retail clinics are becoming a popular alternative in the United States, with up to 10 million annual visits at more than 1,800 locations.

Terms of the deal have not been released. Walgreens launched in-store clinics in 2007 to compete with CVS (NYSE:CVS) MinuteClinic. Expansion has been slow as the count of in-store clinics is only up 6 percent since 2009, while CVS is up almost 1,000 MinuteClinics and recently bought Target's (NYSE:TGT) pharmacies and clinics for $1.9 billion.

Walgreens has been developing and rolling out new formats and the company's real estate strategy is being revised as executives look to trim roughly $1 billion in costs following the acquisition of Boots Alliance at the end of last year.

For more:
-See this Crain's article

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