The U.S. healthcare system continues to weather the residual effects of the COVID-19 pandemic. Despite its woes, the industry is agile and major retailers have stepped-up in the healthcare system, recognizing the global demand.
Two of the largest retail pharmacies, CVS Health and Walgreens, have each unveiled strategic plans to address the shifting needs of patients – both retailers are already beginning to execute their plans to step into the primary care space.
In late 2021, CVS announced plans to remake 900 stores into a new store format that will include more health services, including primary care. Meanwhile, Walgreens invested $5.2 billion in value-based provider network, VillageMD, to accelerate the opening of over 200 cobranded medical clinics.
Patients may find a primary care practice at CVS or Walgreens attractive. Both retail pharmacies offer the accessibility and convenience that their medical office physician doesn’t. This confluence of healthcare and retail isn’t a new trend, but it has certainly been turbocharged since the pandemic, driven by factors such as accessibility, convenience and more.
Making Primary Care Physically Accessible
There are many benefits that an expanded healthcare facility at CVS and Walgreens can offer. Retail pharmacies have ample parking and proximity to public transportation, and patients will be merely feet away from the pharmacy for picking-up and dropping-off prescriptions, eliminating a stop in their already-busy lives. CVS and Walgreens also offer numerous locations, with a combined total of over 19,000 stores nationwide.
In efforts to improve accessibility, CVS partnered with Uber Health to provide free rides to people seeking medical care in communities of need under their new initiative, Health Zones.
As part of its own strategy, Walgreens recently partnered with Shipt, a Target-owned delivery service. Their partnership aligns with Walgreens’ mission to deliver convenient solutions to customers who lead busy lives and are beginning to prioritize their health and wellness.
Patients Prefer Convenience
In light of the ever-changing regulations related to the Covid-19 pandemic, Americans have adjusted many of their behaviors over the last two years, and their expectations as patients are no exception. These days, when it comes to healthcare, patients expect convenience, accessibility and affordable care.
In response, both CVS and Walgreens are amping up their digital capabilities. Recently, CVS announced a new health dashboard platform which will enable customers to access their vaccine cards and vaccine information. The retail pharmacy plans to invest $3 billion on digital enhancements to improve the consumer experience as well as their community locations.
To meet their customers’ demands, Walgreens’ health corner initiative encompasses a mobile app component with medication and appointment reminders, as well as support resources.
What Does This Mean for Real Estate?
Cue “medtail” – the intersection between healthcare, retail, wellness, and in this case, real estate.
As retailers begin bringing primary care closer to the customer, medtail facilities are an attractive alternative for everyone – the patient, the customer, the property manager, the broker, and even the fellow tenants who will benefit from medtail when the patient opts for an ice cream after their pediatric appointment or decides to continue shopping while they’re out and about.
CVS plans to open hundreds of primary care centers to its network of MinuteClinics, drugstores and health-focused HealthHUB locations “as it moves from an episodic to more longitudinal approach to care.”
We can expect the boom in healthcare real estate to continue to surge as outpatient and specialty facilities, like CVS’s, offset overcrowded hospitals and urgent care centers. Tether Advisors found that nearly 80% of survey respondents believe medtail investment will increase in the coming year.