From the Boston Globe, Walgreens looks to open retail clinics in Mass:
A Take Care spokeswoman, Lauren Tierney, said yesterday that the company expects to open the first of its Bay State clinics in the fall. The company currently operates 173 clinics in 14 states and intends to have 400 running nationwide by the end of the year.
Tierney said the company was attracted to Massachusetts, in part, because of the state’s drive toward near-universal health coverage.
“We applaud the progressive efforts Massachusetts has taken to cover more lives in the state,” Tierney said. “And we hope that Take Care health clinics can provide more access points to get patients into the system.”
This is the quote that has me scratching my head. Why is universal health coverage good for a retail clinic outfit? Shouldn’t it be the opposite — that, as previously posted, 50%+ of the walk-in care has no insurance, thus you’d go where no other alternatives exist? Take Care was acquired last year after building about 100 stores and, I think, Walgreens was right to see the opportunity.
I suspect the play here is less the coverage for healthcare, but more the pharmacy, for which any health plan can provide legitimate, cost-savings benefits. After all, Walgreens (and CVS) are in the pharmacy business. This after Walgreens targets 7,000 stores nationwide and Rite-Aid buys up Brooks. If you’re in the Northeast, you know that the CVS store is as ubiquitous as Starbucks, but that won’t even match the super-chains:
Although the drugstore chains can’t beat Wal-Mart Stores Inc. or Target Corp. on price for health and beauty aids or other items, they are superior on convenience, Mr. Hertel said. “Consumers get choices, pricing, hours, and a lot of the benefits that go with 24-hour access nationwide to a prescription system,” he said.
Ah, it’s store placement — that’s how the drugstores will compete.
UPDATED:
So this tells me that Walgreens’ or CVS’ or Rite-Aid’s comparative advantage lies in:
- Being open after hours to suggest they are “always open”
- Locating themselves fractionally closer to you than the big box (Wal-mart, Target) retailers
Therefore, population density and socio-economic makeup is critical to the drugstore chain’s survival as they aren’t as efficient as the big boxes at logistics. Since they have to charge higher prices for that inefficiency, they can make it up on smaller, more profitable sales. (Instead of the CostCo size tube of… well, never mind.)
Hmmm. If I owned a drugstore chain, I’d try opening a store next to an ER in a well-heeled zip code to see if it out-performed one with a clinic in it…
