Attracting seniors is no easy task for big retailers, despite billions of dollars in investments in the last few years.
Investments have ranged from strategic shifts to existing clinic operations to multibillion-dollar acquisitions of senior-focused primary care providers, with varying levels of success. Retailers including CVS, Kroger and Amazon are forging ahead with plans to provide healthcare services to seniors, while Walgreens is taking a step back from its investments and Walmart has shut down its health unit.
Related: Why retailers are targeting seniors for growth opportunities
Analysts, consultants and healthcare leaders say the quality of patients' relationships with their providers is the key factor in determining whether seniors seek care through retailers. They say retailers' success comes down to understanding the demographic they are trying to serve and seniors' distinct set of needs.
Balancing that connection with retailers' obsession with convenience is taking longer than some companies initially thought.
Kroger Health's The Little Clinic was founded in 2003 and serves more than 1.5 million patients annually. Recent efforts to specifically draw in seniors have been challenging, Kroger Health President Colleen Lindholz said.
Nearly a year ago, Kroger began offering senior-focused care at eight of its The Little Clinic sites in Atlanta, in addition to their regular services providing immediate treatment for minor illnesses and injury, similar to urgent care. The hope was to expand the senior care model to other clinics if it was successful, but that hasn’t happened yet.
Seniors are using alternative care sites, such as urgent care or retail clinics. About 60% of adults aged 50 to 80 years old reported going to an alternative care site in the past two years, according to a national poll released earlier this year by the University of Michigan’s Institute for Healthcare Policy and Innovation. Still, of those who already had a primary care provider, 67% said they felt more connected to their provider in the traditional setting compared with the alternative site.
Older patients value relationships with their providers, said David Lipschutz, co-director at the Center for Medicare Advocacy.
“They want to have an ongoing, consistent and long-term relationship with not only their primary care provider but specialists, too,” he said. “Unless you can see the same person [at a retail clinic] on a consistent basis, I think that might be a deterrent for folks who do value that relationship.”
Lindholz said Kroger is using grassroots marketing efforts and collaborations with primary care providers to connect with older patients.
“It’s going to take a little while, but I think it’s the future, and it’s most definitely where we want to go because that’s the population of people that need the most help and that we can actually decrease the total cost of care downstream,” Lindholz said.
Kroger has not disclosed its investment in the senior care model.
Jeff Goldsmith, president of consulting firm Health Futures, is dubious about the retail clinic model. “Convenient care is for young people,” he said.
“The key to being a senior is that you’re falling apart, and a whole bunch of stuff is not working like it’s supposed to,” Goldsmith said. “It’s not like episodic, one-off encounters with the [healthcare provider] based on convenience solve a lot of problems for us. They really don’t. What’s important is that someone understands the full scope of our risk.”
Incorporating convenience into integrated care management is tricky for all retailers, no matter the patient demographic. Retailers are facing the same problems as other traditional providers in the industry, said Brian Tanquilut, managing director of healthcare services equity research at Jefferies. He said the trouble retailers are facing reflects a tough operating environment for risk-based care, which is a key part of the strategy when seeing seniors on Medicare Advantage plans.
Caring for seniors requires long-term investment strategies to achieve profitability, but some retailers have opted to back away from clinical care.
The now-defunct Walmart Health abruptly closed all 51 in-store clinics in June and is instead leasing those spaces to other providers such as Humana-owned CenterWell and Mercy Primary Care. Prior to the closures, Walmart said the clinics were no longer a sustainable business model. The company did not disclose the losses it sustained from the clinics.
Walgreens invested more than $6 billion in VillageMD, a primary and multispecialty care provider that serves a large senior population. The two had planned to roll out hundreds of new primary care clinics, including some attached to Walgreens stores, over the next few years. Those plans fell apart as Walgreens’ investment failed to bring promised returns, leading VillageMD to sharply reverse expansion plans and close 160 locations in the first half of 2024.
But retailers haven't stopped experimenting just yet, and some are looking at pairing senior-focused services with other platforms.
Amazon’s One Medical, which acquired senior primary care provider Iora Health in 2021, continues to offer services specifically targeted toward adults aged 65 years and older, in addition to a digital care platform that appeals to younger patients.
CVS' in-store MinuteClinic sites are working alongside Oak Street Health, a senior-focused primary care provider.
CVS operates roughly 1,000 MinuteClinic locations in more than 30 states, offering acute care, preventive care and chronic disease management for patients aged 18 months and older. Last month, CVS said MinuteClinic is also becoming an in-network primary care provider for select Aetna plan members, as part of a larger strategy to expand primary care services at the walk-in clinics.
But CVS has also invested heavily into Oak Street, which it acquired in 2023 for $10.6 billion, and remains intent on opening dozens of new Oak Street clinics, despite trouble in other parts of the company. Many of the clinics are standalone locations, while others are either connected to a CVS store or replace retail space within a store.
MinuteClinic and Oak Street typically serve different patient demographics, but the services could overlap for seniors seeking care on nights and weekends.
“MinuteClinic and Oak Street Health share the same goal, to increase access to primary care for patients and deliver better value for patients and payers,” CVS said in a statement. “We’re stronger to have both assets in the community.”
Ultimately, retail clinics can play an important role by providing additional access to care and keeping patients out of the emergency room. The alternative sites can be viewed as complementary to a regular primary care provider, said Dr. Jeffrey Kullgren, a primary care physician at VA Ann Arbor Healthcare System and associate professor of internal medicine at the University of Michigan.
The trick is figuring out to make it work from a business perspective, and retailers are still trying to find solid footing.
“There are all kind of situations in which somebody would prefer if their primary care provider can deal with the situation, but … it’s something much more complex where somebody needs to be seen very quickly,” Kullgren said. “My hope for the future would be that we could really figure out what is the optimal role for some of these settings of care."
