“Our right to win can’t just rely on the fact that we have a great brand,” Driscoll says. “We’ve got to do more to really engage the patient.”
Still, Gordon says Walgreens and VillageMD will have to spend heavily on advertising to convince consumers accustomed to getting checkups at a doctor’s office that a drugstore clinic is just as good.
“To attract those people, you’ll really have to pound them with marketing,” Gordon says.
Hiring doctors and nurses will be another costly and difficult hurdle as Walgreens and VillageMD work toward their goal of 1,000 store clinics.
“The war for talent is the biggest problem with most of these multisite platforms and their growth,” says Nathan Ray, a partner at Chicago consulting firm West Monroe.
Walgreens store clinics will compete for talent with other companies moving into primary care, including CVS, Walmart and Amazon, as well as traditional, perhaps more-prestigious practice settings such as independent physicians’ groups, hospitals and academic medical centers.
“It’s one thing to have a nurse practitioner or physician assistant who enjoys having an independent practice in a retail health location,” Pathnak says. “It’s another thing for a doctor to say, 'I’m going to practice next to where you can get your candies and sodas.'”
Walgreens is counting on VillageMD to handle recruiting doctors, establish and manage relationships with health insurers, and deal with other operational challenges of running the in-store clinics.
VillageMD CEO Tim Barry says the company hasn’t had trouble recruiting physicians for drugstore clinics, adding that many came from large practice groups. With the addition of Summit, VillageMD will operate 680 locations, most of which are stand-alone offices. But there’s a worsening shortage of primary care physicians in the U.S. as many medical students pursue higher-paying specialties. Data from the Association of American Medical Colleges shows that the U.S. could be missing up to 48,000 primary care physicians by 2034.
The average VillageMD clinic at a Walgreens store has about two physicians and two additional nurse practitioners or physician assistants, Barry says, and physicians treat 10 to 20 patients per day.
He says VillageMD will offer competitive salaries as it works to open more clinics in Walgreens stores, but won’t disclose average pay for doctors at the clinics. He says another selling point for physicians is the opportunity to work in a value-based care model that rewards them for providing high-quality care, not volume.
“Our doctors—because of their demonstration of better outcomes—generally make more at Village than they make wherever they were prior,” Barry says.
Another challenge for Walgreens and VillageMD will be navigating specialist relationships with external healthcare providers. Barry says that while VillageMD employs some specialists at its more than 120 stand-alone locations, the co-located Walgreens clinics rarely have specialists. That requires VillageMD to set up specialist relationships with nearby external healthcare providers, where Village physicians can refer patients.