Advocate Health Care closing its clinics inside Illinois Walgreens stores

Advocate Health Care is closing all 47 of the clinics it operates inside Walgreens stores in Illinois, the health system announced Wednesday.
The clinics will close Feb. 6. One or two medical office assistants work at each of the clinics, along with additional clinicians who support virtual care, and Advocate is working to find alternate roles for those employees, Advocate said in a statement.
“This allows us to focus on additional ways patients prefer to access care, when and where they need it, including expanded virtual services that provide care within the comfort of their own home, as well as convenient access to urgent care and primary care locations in the community,” Advocate said in the statement.
Advocate noted that as part of a recently announced plan to overhaul how it provides care on the South Side of Chicago, it will open care locations in churches and community centers where advanced practice providers (such as nurse practitioners or physician assistants) will address common needs such as colds, sore throats, flu and chronic disease management, over video calls. It also plans to expand services at its Imani Village outpatient clinic on the South Side.
Previously, Advocate Medical Group closed seven of its clinics in Walgreens stores in February 2020, saying, at the time in a letter that, “The company found overlap in available healthcare services in the communities where Advocate Clinic at Walgreens are located, which has resulted in volumes that are unsustainable.”
Of the new closures, Walgreens said in a statement Wednesday, “We are partnering closely with Advocate to navigate this transition.” Walgreens noted that patients can see doctors or nurse practitioners for a range of conditions through Walgreens Virtual Healthcare.
In recent months, Walgreens has also been pivoting away from offering other types of health care clinics in its stores. Under previous Walgreens CEOs, the company invested billions of dollars into primary care provider VillageMD and had planned to put Village Medical clinics in 1,000 of its stores by 2027. Walgreens had once aimed to become more of an overall health care destination.
Walgreens, however, has been backtracking on that plan, with current CEO Tim Wentworth saying that Walgreens wants to refocus on being a “retail-pharmacy-led company.” Wentworth said in March that Walgreens had recorded a $5.8 billion impairment charge related to VillageMD, and that VillageMD would close 160 clinics. In August, Walgreens said in a filing with the Securities and Exchange Commission that it was considering selling all or part of its VillageMD business.
Similarly, Walmart announced in April that it was closing its Walmart Health centers, citing challenges related to reimbursements by insurers and rising operating costs.
Retailers may be struggling with in-store health care clinics partly because payments from insurers for the types of services provided at the clinics are often low, said Timothy Hoff, a professor of management and health policy at Northeastern University in Boston. When retailers opened many of the clinics years ago, they may have expected that more patients would use them, or that patients would buy more items in the stores before or after they visited the clinics, he said.
“In a model where the reimbursement is low for any health care service, the way you break even or earn a profit is you have to do more of those services, so you have to pump a lot of volume through the door,” said Hoff, who recently wrote an article about the struggles of retail health clinics for the Harvard Business Review. “I think the demand for the kinds of services retail clinics offer, and I think demand for retail clinics generally, I don’t think it’s been as much as many of these places expected when they opened their doors.”
It can also be difficult to find enough providers to offer services, which can lead to longer waits for patients, negating what’s supposed to be the convenience of visiting an in-store clinic, he said.
For health systems to have success running clinics in stores they must ensure their retail clinics are integrated with other services in the health system, he said. “These can’t be sort of islands unto themselves,” Hoff said.