Turmoil smacks retail healthcare (updated): Walgreens to shut 60 VillageMDs, as Village names 3 new presidents; CVS shakeup continues; Rite Aid bankrupt; Amazon’s One Medical rebrands Iora

October 18, 2023 | by

Walgreens shuttering 60 VillageMD locations adjacent to stores in five markets. This follows a second disappointing quarter for Walgreens Boots Alliance [Q3 TTA 28 June] and a fiscal Q4 net loss of $180 million, or 21 cents per share. Their CFO attributed the loss to charges for certain legal and regulatory approvals and settlements (in September, $44 million for their Theranos fling), and one-time charges related to Walgreens’ cost-cutting program. Cuts announced by acting CEO Ginger Graham are $1 billion in 2024. Shares perked up slightly; since the start of 2023, share value has been down 39% for the year before the earnings call on 12 October. 

Cutting 27% of co-located VillageMD clinics in ‘non-strategic locations’ is a start. Currently, about 220 are co-located with Walgreens which followed an original plan of about 200 in 2023. However, since WBA bought a 63% share in VillageMD for $5.3 billion in 2021, VillageMD has aggressively expanded. They bought Summit Health last November for $8.9 billion ($3.5 billion from WBA) which included CityMD, acquired Starling Physicians in Connecticut, Family and Internal Medicine Associates in central Kentucky, and Dallas (Texas) Internal Medicine and Geriatric Specialists for a whopping 700 locations [TTA 9 Mar]. Last quarter’s revenue grew by 17%. But expansion can be problematic. Together with the underperformance of CityMD, which came with the acquisition of Summit, and weak retail sales, for WBA this led to an adjusted operating loss of $172 million for the US Healthcare segment. But…there may be more. HISTalk cites an analysis by AI company founder Sergei Polevikov that attributes half of WBA’s projected 2023 $3 billion net loss, its first ever, to…VillageMD. Yet it appears, at least in the press, that Walgreens is staking a great deal on VillageMD, even though it may be a ‘gamble’. FierceHealthcare

As noted last week, WBA has experienced problems from the streets to the suites. Pharmacy workers have walked out, the CEO was given the heave-ho before Labor Day and replaced in record time, the CFO exited in July, and the CIO mysteriously departed at the top of this month. Bad earnings and a depressed retail/pharmacy outlook, without Covid’s ‘black swan’ stimulus, will do that. Even the US Healthcare head on the earnings call resorted to the anodyne “We will continue to grow in 2024 but with a renewed focus on more profitable growth.”  TTA 11 Oct, Chain Store Age, CNBC

Updated & Breaking  VillageMD’s three new divisional presidents. Village Medical’s new president is Rishi Sikka, MD, who is joining from president of system enterprises at Sutter Health. CityMD is promoting Dan Frogel, MD to the dual role of president and chief clinical officer. He joined in 2013 as a founder of Premier Care which was merged into CityMD and has had other positions within CityMD and Summit Health. At Summit Health, Becky Levy, JD moves to the new position of president of Summit Health and Starling Physicians. She has been with Summit Health since 2011, previously as chief legal officer, chief administrative officer, and chief strategy officer. Business Wire 18 October

CVS Health continues to Shake & Bake. Chief financial officer and recently announced president of Health Services Shawn Guertin is taking a leave of absence due to “unforeseen family health reasons”. The CFO role will be covered by Tom Cowhey, SVP of corporate finance with Mike Pykosz, CEO of Oak Street Health, stepping in as the interim president of health services. Interestingly, the CVS release included Kyle Armbrester, the CEO of Signify Health, as being “highly involved in the Health Services strategy”. Both Oak Street and Signify were part of a CVS buying binge this year and last that topped $18.6 billion. Neither is reportedly profitable. As usually happens when the numbers don’t look good, CVS will be laying off 5,000 in the next few months, with the first tranche of 1,200 this month [TTA 23 Aug].  FierceHealthcare, Healthcare Dive

Retail pharmacy chain Rite Aid declared Chapter 11 last Sunday. One of the US’ largest chains with 2,000 locations in 17 states, it will close 150 locations and sell its pharmacy benefit manager Elixir. Rite Aid has been beleaguered with over 1,600 lawsuits over opioid prescriptions from Federal to state and local governments, hospitals, and individuals, as well as high debt and heavy competition from other retailers like Walgreens, CVS, and Walmart, as well as Amazon. The greatest numbers are in Michigan, California, New York, New Jersey, and Pennsylvania.  Reuters, The Hill

And for Amazon, Iora Health is now One Medical Senior. Iora was acquired by One Medical in 2021 but never rebranded. It was quite different than One Medical’s membership concierge-style practices in serving primarily Medicare patients in full-risk value-based care models such as Medicare Advantage (MA) and Medicare shared savings programs at 46 locations in seven states. One Medical intends to be able to serve patients of any age at all sites, according to One Medical VP Natasha Bhuyan’s comments to Healthcare Dive at HLTH last week.

Rounding up mid-August: PCORI funds 16 projects with $85 million, InTouch’s Rite Aid deal, Suennen leaves GE Ventures, NHS lost 10K patient records last year

August 23, 2018 | by
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2017/12/Lasso.jpg” thumb_width=”150″ /]Rounding up August as we wind down our last weeks of summer holidays. 

The Patient-Centered Outcomes Research Institute (PCORI) announced earlier this week that they are funding 16 studies which compare two or more approaches to improve care and outcomes for a range of conditions. Included in the $85 million funding are studies incorporating technology. One is a $13.3 million grant for a West Virginia University study utilizing telehealth to monitor patients with major depressive disorders comparing medication, cognitive behavior therapy (CBT), and medication plus remote CBT. PCORI Release

InTouch Health, an enterprise telehealth provider which most recently partnered with RPM developer Vivify Health [TTA 19 Dec] to move into in-home and post-acute settings, is now moving into retail with Rite Aid. The letter of intent is to help Rite Aid build up the technology in their existing health kiosks in pharmacies and ‘alternative care sites’. Rite Aid has had a long standing interest in kiosks, including as one of the last customers of HealthSpot. With their Albertsons merger scuttled, Rite Aid is seeking other business and interest. One of InTouch’s executives is EVP of Marketing and Consumer Solutions Steve Cashman, who founded and headed HealthSpot. InTouch is also participating in the World Telehealth Initiative, a nonprofit organization which seeks to bring telehealth expertise into worldwide communities in need. InTouch will donate devices, access to its virtual network, and access to doctors donating their time. Mobihealthnews.

Lisa Suennen, a fixture at many health tech conferences and one of the few women with both presence and clout in the funding sphere, has departed GE Ventures, GE’s VC arm. She was senior managing director focusing on healthcare companies, successfully exiting several in her portfolio to UnitedHealth and Aetna. No reason was given for her exit after a stint of under two years, other than the anodyne “find a new adventure.” GE is planning to spin off its healthcare businesses as part of its restructuring. CNBC. 

And the week would not be complete without a report about NHS losing nearly 10,000 patient records–paper and electronic–last year, according to information released under UK freedom of information laws. Without this information, doctors have trouble finding patient history sources and prior diagnostic records. There is also abundant opportunity for fraud, as Everything Winds Up Somewhere, and that somewhere could be criminal. Last year, Members of Parliament said the NHS had “badly failed patients” after a scandal in which at least 708,000 pieces of correspondence–including blood tests, cancer screening appointments, medication changes, and child protection notes–piled up in storerooms. Sunday Times. If paywalled, see the attached PDF.

Retail health convergence and ‘Amazon Effect’ continues with Albertsons’ acquisition of Rite Aid (updated)

February 20, 2018 | by | 1 Comment

The perceived ‘Amazon Effect’ continues. As predicted when the CVS-Aetna merger proposal made its first news last October while the Autumn Leaves were falling (cue the Ferrante and Teicher), other retail shoes would be dropping. Today’s major news is supermarket Albertsons buying most of drug store chain Rite Aid–the 2,600 stores that Walgreens Boots was prohibited from acquiring due to antitrust concerns. (Their eventual deal was for 1,932 stores.)

The terms are cash and stock with an estimated value of the combined companies of $24 billion (WSJ). Present Rite Aid shareholders will take 29 percent of the combined companies and present Albertson shareholders over 70 percent. Another benefit for Albertsons–it’s a quick and easy way to go public without an IPO using Rite Aid’s public status to effect a reverse takeover merger. It solves for Rite Aid (and Walgreens) the large problem of the unsold Rite Aid stores. 

Albertsons’ 2,200 supermarkets are in 38 states and the District of Columbia and comprise multiple brands such as Safeway and Acme in addition to Albertsons. Rite Aid stand-alone stores will continue to operate under their brand name as will most in-store pharmacies. The Rite Aid CEO John Standley will become CEO of the combined company with the Albertsons CEO moving up to chairman. CNBC, Seeking Alpha

Updated: For your weekend reading, here’s Jane Sarasohn-Kahn’s measured take on this acquisition in her HealthPopuli.

Who’s next? Place your bets here in Comments!

Unhappy endings? HealthSpot’s remains to Rite Aid, Theranos’ story to Hollywood

June 14, 2016 | by

HealthSpot Station’s assets to Rite Aid, minus the ‘froth’. On Monday, drug store chain Rite Aid won the US Bankruptcy Court in Columbus, Ohio’s mandated auction for the inventory, most assets and IP for its entry bid of $1.15 million. According to Columbus Business First (subscription only), a touted second bid by a central Ohio investor group was $1 million–and stayed right there with no second bid. This group had invested $650,000 before HealthSpot entered Chapter 7. A dark horse third bidder, which came in at the last minute, never put money on the line.

The Ohio business group leader, local assisted living facility owner Paul Gross, interestingly maintained his faith in the kiosk concept to Columbus Business First in an earlier interview, rapping the prior management for squandering approximately $47 million (more, given Xerox‘s never-disclosed investment) on office furniture, lavish executive salaries and misbegotten marketing (quoted in MedCityNews). 25 of the kiosks were in Rite Aid locations in Ohio and others with Cleveland Clinic, but there are 137 still ‘in the box’. Perhaps ‘misbegotten’ should be applied to the concept (kiosks too big, expensive) and not the marketing communications, which in this Editor’s professional judgment were strong and appealing, but ran into the ‘lipstick on a pig’ wall.

One wonders what Rite Aid, in the throes of its own difficult merger with Walgreen Boots Alliance, will do with the assets. TTA’s earlier stories on HealthSpot.

Theranos the Movie, starring Jennifer Lawrence. Co-starring Walgreens? ‘Hunger Games’ star Jennifer Lawrence has reportedly agreed to star in ‘The Big Short’ director Adam McKay’s adaptation of the story. (Fortune) Certainly there is a resemblance to CEO Elizabeth Holmes Frogeyed Sprite (‘Bugeyed’ to us Yanks–Ed.) crossed with Steve Jobs. Ms Lawrence has already played a young, aggressive, come-from-nada inventor of household gadgets in ‘Joy’. The Theranos story is appearing to be the ‘Joy’ story in reverse. Suggested title: ‘The Royal Scam’? (credit Steely Dan, circa 1974). ‘Less Than Zero’ (Bret Easton Ellis) is taken, now describing Ms Holmes’ net worth according to Forbes.

Mr McKay will be ripping from the headlines in progress, should the movie actually be made. (more…)

Rock Health: 1st Q funding deals up nearly 50%, approaches $1bn (US)

April 7, 2016 | by

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/04/RockHealthChart1.001-1200×845.jpeg” thumb_width=”150″ /]Funding’s up, but the digital darlings have changed. The stock market and tech sector may have been uncertain kicking off 2016, but digital health wasn’t. Rock Health’s first report for 2016 exudes optimism. Compared to the same quarter in 2015, funding increased nearly 50 percent to $981.3 million, the highest amount since 2011. But the devil may be in the details:

  • Five deals accounted for 56 percent of the volume (in descending order: Flatiron Health (clinical intel for cancer care), Jawbone, HealthLine (consumer health info), Health Catalyst (data warehousing) and Higi, an odd little kiosk + consumer engagement program nationally placed in Rite Aid stores–odd enough to gain $40 million in its first venture round
  • Seed and Series A raises were still well over half–54 percent, over the 50 percent in 2015
  • Later stage deals (Series D and above) shrank to 13 percent in 2016 from 35 percent
  • Top categories also demonstrated the fickleness of funding favorites. Only two categories in the top six were carry-overs from 2015: wearables (driven by Jawbone) and consumer engagement. New favorites: analytics/big data, population health management, consumer health information and EHR/clinical workflow.
  • There were no venture-backed IPOs in the quarter, and public company performance was down (9 percent y/y)

The new picture favors what to do with the data–finding trends and putting them to use both consumer and clinical sides. And exits were popular as well: 187 was the Rock Health count, with fitness wear Asics‘ acquisition of the Runkeeper fitness wearable and provider One Medical acquiring the Rise app. Will the trend continue in 2nd quarter? Stay tuned….Rock Health Q1 Update

Outsourcing of retail clinics–another reason for HealthSpot’s demise? (US)

January 14, 2016 | by

Walgreens earlier this week announced another round of outsourcing their in-store health clinics to a local health system, this time in the Midwest US with Advocate Health Care. It affects 56 locations in the Chicago, Illinois area which will operate as Advocate Clinic at Walgreens in May 2016. It’s an interesting spin on the much-touted integration of healthcare services into retail pharmacies. It gives an integrated health system a prime location for community services–a clean, well-lighted place (to quote Hemingway, minus the daiquiris) with minimal overhead that provides one-stop-shopping for patient pharmacy and OTC products. It also solves part of the ‘fragmentation of care’ problem for Advocate patients as their records will go straight into their EHR. For Walgreens, it offloads the licensure and operating expenses of a clinic, gives a strong competitive advantage lent by the legitimacy of a leading provider, and attracts Advocate patients to their locations. Walgreens release  Last August, Walgreens turned over the keys of 25 Washington and Oregon clinics to Providence Health & Services in what now can be seen as a trial balloon.

What is surprising is how few Walgreens have clinic services–400 of over 8,100–over nine years of operations, starting with the acquisition of former travel industry executive Hal Rosenbluth’s 25 or so TakeCare Clinics around Philadelphia back in 2007. Yet further clinic expansion has been difficult as many locations have no physical space, there are restrictive state laws and the competition is everywhere between over 1,000 CVS Minute Clinics and local urgent care clinics. CVS also recently acquired 80 Target pharmacies and walk-in clinics. It’s reported that profitability has been a challenge for Walgreens in the clinic biz. Expect to see more of these arrangements to grow Walgreens’ clinic network.

Why might this be a contributor to HealthSpot Station’s end? A change of direction and a need for cost cutting that wasn’t there a year ago.  (more…)

HealthSpot closes the doors, shuts kiosks in Rite Aid, Cleveland Clinic (updated)

January 8, 2016 | by | 2 Comments

As we reported last July, HealthSpot, the Dublin, Ohio, based telemedicine health kiosk business which was [grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/01/HealthSpot-logo-1.png” thumb_width=”150″ /]carrying out a retail trial with Rite Aid since November 2014, started commercial operations in 25 locations in three Ohio areas.

In October reports emerged of a patent infringement claim that has been ongoing since April 2014 against HealthSpot by Nevada-based Computerized Screening. (More on this ongoing series of lawsuits in Ohio and Nevada is here.)

According to reports in Columbus Business First, HealthSpot has now informed Rite Aid that it would cease operations as of 31 December last year and its telemedicine kiosks are reported to have shut down in Rite Aid pharmacies. HealthSpot has also notified Cleveland Clinic that it has discontinued operations, which shuts its pilot with Cleveland Clinic in northeast Ohio.

HealthSpot’s website remains live but the last entry in the press releases section is from September 2015 and is on events at which HealthSpot was to participate in September and November. The blog page on its website is well out of date with the last update dated as far back as March 2015. (Links for locations and patient log in were inoperable–Ed. Donna)

One recent news report stated that attempts to contact CEO Steve Cashman went unanswered.

In November 2014, HealthSpot received a major investment from Xerox on top of a $18.3 million springtime round [TTA 13 Nov 14].

Updated 13 Jan (Editor Donna)

The Columbus Business First articles that Editor Chrys has linked to, as of this point, are the most informative. Neil Versel and Stephanie Baum also have related articles in MedCityNews. They also chewed it over with HealthcareScene network’s John Lynn last Friday on video (starts at 26:30) with a surprising revelation that Mr Cashman had been in touch with Mr Lynn, to be published in one of their blogs (but not yet as of this update.) Thus the mystery remains.

Xerox has issued a statement of their continued interest and support of the healthcare sector which is covered in MedCityNews above. We also noted their diverse interests in healthcare quality management, data and analytics through through their Midas+ division here last year.

According to CrunchBase, HealthSpot received $43.81 million in financing since 2011, not including the undisclosed support from Xerox, with the most recent raise debt financing of $11.56 million in January 2015. One year ago, HealthSpot looked so promising. (more…)

HealthSpot, Rite Aid open 25 locations in Ohio

July 21, 2015 | by
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2015/07/Healthspot-station.jpg” thumb_width=”150″ /]Telehealth/telemedicine kiosk HealthSpot and retail drug chain giant Rite Aid, which announced their partnership last November [TTA 11 Nov], have now set up shop in 25 locations in three Ohio areas–Akron/Canton, Cleveland and Dayton/Springfield. Since late May, the staffed stations have treated over 5,000 customers ages 3 and above for minor and common health conditions, including cold and flu, rashes and skin conditions, eye conditions, earaches and seasonal allergies. The kiosks combine video consults with hands-on assistance in vital signs measurement from a wellness attendant, and their recording software interfaces with insurance eligibility, electronic medical records and billing systems. The network of medical professionals on the telemedicine consults are from Cleveland Clinic, Kettering Health Network and University Hospitals, with pediatric specialists from UH Rainbow Babies & Children’s Hospital. According to HealthSpot’s CEO Steve Cashman, a significant portion of early visitors are Medicaid recipients, who through a $60 station visit may be avoiding a far more expensive (~$600) ER visit. For the early stage HealthSpot it’s a major rollout, but for Rite Aid, which is not known for being as cutting edge in location design as CVS or Walgreens, it represents a significant move forward into onsite wellness services. Cleveland.com, Drug Store News. Rite Aid/HealthSpot demo video. Business Wire release.

Follow up: Xerox invests in HealthSpot Station kiosks (US)

November 13, 2014 | by

The day after this Editor posted on telehealth/virtual consult kiosk HealthSpot Station‘s new partnerships with Mayo Clinic and major drug retailer Rite Aid, Xerox announced their investment in the company. Xerox is not a business services organization one immediately associates with healthcare technology, but perhaps not anymore, based on this quote from Connie Harvey, Xerox’ chief operating officer of Commercial Healthcare: “HealthSpot is at the center of healthcare’s shift to a patient-centered model of care, and our investment in the company demonstrates Xerox’s commitment to transforming traditional healthcare into a high-value delivery system for patients, providers and payers.” Xerox will also be supplying BPO–business process outsourcing–services for cloud hosting, system integration, claims eligibility and claims submissions. But there’s more…. (more…)

Telehealth kiosk HealthSpot gains trials with Rite Aid, Mayo Clinic

November 11, 2014 | by
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2014/05/Healthspot-stationbooth.jpg” thumb_width=”150″ /] HealthSpot Station, which was one of the higher points of this past May’s ATA, in the past month has announced two significant pilots. The retail pilot is with Rite Aid, the US’ third largest drug store chain (4,600 stores), with telehealth/telemedicine kiosks located in select Rite Aid locations in Ohio–Akron/Canton, Cleveland and Dayton/Springfield areas. The usage of the kiosks will be limited to common health conditions, such as cold, earaches, sore throat, sinus infections, upper respiratory infections, rashes, skin and eye conditions. HealthSpot Station kiosks are enclosed, free-standing units which use both video consults and real-time interaction with telehealth devices for remote diagnosis. They connect to a network of board-certified medical professionals at Cleveland Clinic and other major health systems across Ohio. Start date and duration were not disclosed.

This follows the October announcement with Mayo Clinic of an in-house pilot in Austin and Albert Lea, Minnesota with approximately 2,000 Mayo Clinic Health System employees (more…)