Walgreens Has 200 VillageMD Clinics Attached To Stores As Doctor Network Takes Off

Walgreens-backed doctor clinic operator VillageMD now has a network over more than 680 locations across the U.S., including 200 adjacent to the pharmacy chain’s U.S. drugstores.

Walgreens Boots Alliance chief executive Roz Brewer Thursday morning provided an update on the VillageMD relationship during the drugstore chain’s quarterly earnings call, announcing that VillageMD’s acquisition of Summit Health closed two days ago. VillageMD is buying Summit Health for $8.9 billion to expand doctor-staffed clinics across the country and Walgreens invested $3.5 billion in debt and equity to support the deal.

The transaction includes investments from Walgreens, which already owns more than 60% of VillageMD, and health insurer Cigna’s health services business Evernorth. Primary care provider Summit Health merged with CityMD in 2019 to create a company with more than 1,400 healthcare providers that offer primary, specialty and urgent care.

“VillageMD is leading the way in value-based care for the country, with 393 clinics as of year-end, including 200 co-located with Walgreens, achieving the calendar 2022 target,” Brewer told analysts Thursday on a call to discuss Walgreens fiscal first quarter earnings. “Following the close of the Summit transaction earlier this week, VillageMD now operates over 680 locations across 26 markets.”

The early and future success of the Village Medical at Walgreens clinics, which include eight exam rooms with two physicians and a staff, is already figuring in a more positive future financial outlook for the drugstore chain. Walgreens executives Thursday said they raised the company’s full-year sales guidance to $133.5 billion to $137.5 billion reflecting its “Summit Health acquisition, refreshed currency rates, and first quarter sales ahead of expectations.”

Having more healthcare services and closer relationships with physicians makes Walgreens medical care provider network more attractive to health insurance companies, looking for more convenient and lower cost primary care options for their clients.

VillageMD, which now has some 20,000 employees, is bolstering its management team, launching a national search for a president of the company, reporting directly to chief executive officer Tim Barry. Dr. Jeff Le Benger, current chair and former CEO of Summit, will act as interim president in the meantime.

“Our new organization will continue to be patient centered, physician led and committed to transforming the way healthcare is delivered in the United States,” Barry said in a VillageMD press release announcing the closing of the Summit Health transaction. “As we combine forces, our workforce of 20,000 people will have even more expertise, tools and resources to provide the best care for our patients – whenever and wherever care is needed.”