Walgreens Health Neighborhood

Transcription

1 Walgreens Health Neighborhood Working together to delivery consumercentric care Pat Carroll and Nimesh Jhaveri Member of Walgreens Boots Alliance 2017 Walgreen Co. All rights reserved.

2 WALGREENS BOOTS ALLIANCE 25 countries. 13,200 stores >390 distribution centers >385,000 employees 2 2

3 National omnichannel allows us to support and assist millions of consumers every day Walgreens is a community-based extension of the healthcare provider network with costeffective, personalized care >8,000 retail pharmacies >2,800 of which are in underserved communities 1 Resulting in >800 specialized pharmacies >375 Retail Clinic locations 95 million active Balance Rewards members 6,870 pharmacies with drive-throughs 1, hour pharmacies 10 million retail and digital customers per day 70,000 of the most trusted professionals in healthcare Every second, Walgreens fills >one prescription from a mobile device 1. Murphy PA, Frazee SG, Cantlin JP, Cohen E, Rosan JR, Harshburger DE. Pharmacy provision of influenza vaccinations in medically underserved communities. J Am Pharm Assoc (2003). 2012;52(1): Walgreen Co. All rights reserved. Confidential and proprietary information. 3

4 Health systems are establishing core skills to thrive in the rapidly changing healthcare market Today, health systems must innovate to meet challenges with new opportunities Patient consumerism Patients are key decision makers Provider integration Health systems and providers continue to merge Technology Use of aggregated data and predictive analytics is increasing Payment reform Value-based reimbursement models are growing Payment reform Value-based reimbursement models are growing New revenue streams Health systems are providing enhanced services to increase value to patients New revenue streams Health systems are providing enhanced services to increase value to patients 2015 Walgreen Co. All rights reserved. Confidential and proprietary information. 4

5 The healthcare industry is shifting to a new risk model: from Volume to Value 30% 1/3 increase in healthcare expenditure expected between of this increase is expected to be hospital spend Medical spend growth will outpace pharmacy spend growth, although SRx will be the fastest growing segment Employer payers will remain largest, although Medicare, Medicaid, and individual payer segments will grow 90% 50% of Medicaid lives and 33% of Medicare lives will be in managed plans by 2018 of commercial lives expected to be in a HDHP by 2018 Risk Shift Among Players Government Payers Medicare Medicaid Commercial Payers Employer Individual Insurers & Providers Managed Care Capitation ACO Networks Outcomes Based Bonuses Alternative Value Based Payment Individuals Consumer Driven Health Plans Private and Public Exchanges Increase Premium Share 2015 Walgreen Co. All rights reserved. Confidential and proprietary information. 5

6 Status Quo 5 Must-Have Upgrades for the Consumer- Focused Health System 1 User- Unfriendly 2 One-Size-Fits-All Little Attention to Service Quality Premium Pricing Across the Board Transactional Relationships Frictionless Transactions Automated price estimation platform Digital transaction system 84% of consumers say that price estimates have an impact on choosing a provider Multimodal Access Network Integrated urgent care network Fully controlled retail assets Same-day consults for high-worry conditions Diversified primary care network 6 10 top decision drivers: access and convenience High-Reliability Production Model Consistent service standards Customer-driven quality dashboard Enterprise platform for care standardization 60% of the top 5 loyalty drivers for specialists are related to service or clinical quality Source: The Advisory Board Company 5 Must-Have Upgrades for the Consumer-Focused Health System. Competitive Price Point Low-cost alternatives to high-cost services Rightsized fixed-cost structure 73% of consumers believe that a 3-hour flight or 4-hour drive is worth $4K in savings Loyalty Reward Platform Onboarding process System-wide coordination Technology-enabled personalization Formal membership program 47% of consumers are not highly loyal to their current PCP, may switch providers in the next 12 months 6

7 Consumers take charge in a new healthcare economy As patients become active shoppers and navigate their own care, healthcare providers must adjust to provide value Shop for quality & experience Navigate self-care & health tracking Bare more risk & reward Will no longer be patient 72% of internet 2M+ healthcare 43%employees 70% of patients users look for health information online Provider reviews allow for public domain quality metrics applications Available for consumers personal tracking Collate data to drive outcomes on high deductible health plan Patients are penalized and incentivized for health behaviors change provider for suboptimal experience Demands Include Access & Quality Reasonable Cost 7

8 something magical just happens 8

9 Executive Summary Problem to Solve: Walgreens recognizes the need for differentiation in the healthcare market with an approach that involves development and expansion of adjacent healthcare services Develop adjacent healthcare services which drive the vision to care for more people and communities and is a differentiator in the market Develop a fail-fast program for testing and learning new business opportunities that could deliver significant profits in the mid-term time frame Solution/Core Ideas: Offer lower cost and more convenient sites of care that complement brand and our core business Consumers are looking for better healthcare service options as they pay more out of pocket Health plans and health systems are highly interested in partnering with Walgreens to provide local healthcare services to lower costs and better manage care. Evaluate opportunities and partnership models. Several pilots currently underway are Urgent Care, Hearing Care, Optical Care, Diagnostic Labs and other services coming 9

10 Consumer-centric healthcare practices require convenience, simplicity, and affordability Expanding geographically and digitally will improve care channels and customer satisfaction Brick-and-mortar clinic offerings expanded nationally to more regions Making these two changes will drive industry-wide impact Personalized care coordination Convenient access points for rural communities Low, transparent costs Seamless provider experience Support health system partners Provide on-demand care for patients in large MSAs On-demand telehealth services personalize the digital marketplace 2015 Walgreen Co. All rights reserved. Confidential and proprietary information. 10

11 Partnerships will enable holistic & transformational patient-centric services Walgreens will work with partners to meet the patient s needs and support providers in population health Customer service means convenient access to clinical and pharmacy services Walgreens foundation of Operations, Infrastructure, Data, and Analytics Walgreens customers have access to many critical healthcare services Specialty Urgent Care Health Clinics Immunizations 340B Optical Hearing Labs Onsite Pharmacy Goals Bundled services that meet patients desires, perceptions, and needs Population health solutions for providers who are taking financial risk for value based care Integration Points Conditions Treated Ensure patient receives the most effective service Integrated Scheduling API integration for convenient access Real-time Pricing Ensure patient understands the out of pocket price 11

12 Issues Service Care Provided Low Acuity Providing On Demand Health Care Services High Acuity Retail Clinic Primary Care Urgent Care Emergency Room Generally simple, acute conditions (bronchitis and vaccinations) or preventative care (flu shots) in high-traffic settings Led by a generalist physician, serving as a point of first-contact Increasingly paid on performance managing total health costs Provides care for acute conditions and other services generally not available in a primary care setting (X-rays, diagnostic lab services, etc.) on a walk-in basis Emergency care for serious, high acuity patients, from attack to major trauma and stroke administered by ER physicians and RNs Convenience: High Delivery of care: Low Convenience: Low Delivery of care: High Convenience: High Delivery of care: High Convenience: Low Delivery of care: High No-onsite physicians Typically do not diagnose/treat midacuity patients Shortage of PCPs Appointments lead to difficult timeliness Generally there is a lack of mid-acuity care (x-rays, stitches) Patient awareness of the urgent care model Range of services, convenience, speed of delivery Over crowding Long wait-times for nonemergency patients Expensive Walgreen Co. All rights reserved. Confidential and proprietary information.

13 Healthcare System Partners Examples of patient-centric services 13

14 Driving expansion requires a partnership between Walgreens and a clinical provider with complementary value Real Estate: ~8K (10k) stores Patient Base: ~8M customers per day Clinical staff are customer focused and are operating at the top of their license Prime Real Estate National Brand Robust Omnichannel Key Partnerships Scale-able Operations One of the most trusted national brands Experience in an omnichannel Partnerships with health systems, health plans, onsite locations, and employers Operations platform has a highly engaged field team Economies of scale Partnership Complimentary assets and capabilities accelerate national expansion Clinical Expertise IT Capabilities Strong Leadership Operational Excellence Experience in HIPAA compliant patient records and workflow software Analytic capabilities for management decisions, store selection and issue resolution Leadership in key management roles: can grow to be a national Urgent Care provider Staffing model: efficiently scheduled and monitored to deliver excellent service and lower cost Highly operations focused Marketing Platform Owned marketing platforms: digital presence supports holistic strategy Marketing Plan Clear understanding of the target consumer and how to reach them

15 15 On-Demand Health Vision for Consumers To create an Expedia like offering for consumers to connect with regional and national healthcare services based on three primary tenants: Convenience Show current available care options and provide online scheduling or immediate connection to a clinician. Simplicity Seamlessly integrated with multiple providers to provide a unified experience with appropriate online and offline care options. Affordability Show the out-of-pocket cost for a visit based on insurance coverage and deductibles. 15

16 Price transparency provides frictionless access 2017 Walgreen Co. All rights reserved.

17 Providence Health-Washington and Oregon 2017 Walgreen Co. All rights reserved. 17

18 Price Transparency at Swedish Express Care 2017 Walgreen Co. All rights reserved. 18

19 NYP On-Demand compliments instore offering at Duane Reade 2017 Walgreen Co. All rights reserved. 19

20 Convenient, Trusted, Accessible Care for all Key Differentiators Adult and pediatric Credit card insurance payment No insurance pay Patient time is ~15-30 mins* Diagnostic tools such as: Pulse Oximeter, Temporal Thermometer, Blood Pressure Cuff Scope of Services Anxiety, depression Asthma, bronchitis Back pain Constipation or diarrhea Cough, cold, flu Dizziness, headache Fever Insomnia Skin Conditions Sore Throat Stomach Ache, indigestion Urinary tract infection 2018 Walgreen Co. All rights reserved. Confidential and proprietary information. * Visit time from start to completion

21 Retail Clinics 260+ square feet built into Walgreens space Two exam rooms, with exam tables Restrooms facilities nearby Most conveniently located across from the pharmacy Professionally outfitted with state of the art technology & medical equipment Electronic sign-in kiosks Patient queue, with wait time visibility EMR 2014 Walgreen Co. All rights reserved. 21

22 Healthcare Clinic offers a variety of services Types of Healthcare Clinic visits in 2013 Acute Immunization Preventive Screening Chronic 61.7% 21.7% 8.9% 6.5% 9.0% Shortage of primary care physicians 30k PCP shortage 2025-AAMC study Healthcare Clinic is uniquely positioned Provide complementary primary care services Increase patients access to healthcare services Clark B, Davis J, Hoyem R. The changing scope of retail healthcare clinic visits. Poster presented at: National Nurse Practitioner Symposium: July 10-13, 2014; Keystone, CO 2014 Walgreen Co. All rights reserved. Proprietary and confidential. 22

23 Walgreens engages your consumers more than the traditional healthcare reach Typical reach of Health Systems # of Patient Interactions Per Year Inpatient Outpatient WAG In-Store Reach WAG Home and Virtual Reach *Balance Rewards, disease programs, mobile health tools, etc hundreds 2015 Walgreen Co. All rights reserved. Confidential and proprietary information. Acute Patient Chronic Patient Loyal WAG Customer Community based population health accounts for >80% of total patient engagement 23

24 Two Pronged Retail Health Model Walgreens Health Clinic base business focuses on patient experience and quality of care, while the new model will expand and enhance health system collaborations The foundation of Health Clinics focuses on patient experience & quality of care by using New EMR (Epic) roll-out Enhanced in-store and on-line patient experience Excellence in delivering high-quality care The new model of Health Clinics will expand and enhance Health System collaboration with Providence Express Care Swedish Express Care Community Clinic Advocate Clinic SSM Health Express Clinic Aurora QuickCare Clinic Baptist Health Clinic Sacred Heart Clinic Florida Hospital Express Care Piedmont QuickCare Clinic Vanderbilt Health Clinic UHealth Clinic Car 24

25 Extensive coverage across 31 markets Walgreens owns prime national real estate for Clinics Atlanta Milwaukee Boulder/Denver Nashville Chicago Orlando Cincinnati Pensacola Cleveland Philadelphia Columbus Phoenix Dallas Portland Houston Seattle Indianapolis St. Louis Jacksonville Tampa Kansas City Topeka/Lawrence Knoxville Tucson Las Vegas Washington, D.C. Louisville West Palm Beach Memphis Wichita Miami/ Ft. Lauderdale 2017 Walgreen Co. All rights reserved. Confidential and proprietary information. Retail clinic managed by Walgreens Retail clinic operated by a local health system or transitioning to a health system in 2017 Colored symbols represent markets served by clinics, not the number of locations within markets. 25

26 Urgent Care Develop a consumer centric urgent care service as part of a neighborhood health destination that integrates with other health services and tests a partnership with MedExpress (Optum Health) ~2500 sq. ft. Pilot = 15 stores 26

27 Americans visit the ER 140M+ times per year, while the average visit costs $1,917. Why Urgent Care? 31% more spent and 2% higher utilization by employer-sponsored health plans on ER services in $3B was spent on ER fees between <10% of ER patients require hospitalization <1/3 of patients are able to be seen in the ER in under 15 minutes Walgreen Co. All rights reserved. Confidential and proprietary information. If non-emergency patients did not utilize ERs for medical treatment, we would see a potential savings of $18B. 27

28 Laboratory Services Develop a consumer centric laboratory service as part of a neighborhood health destination that integrates with other health services and tests a partnership with a global leader in laboratory services, LabCorp. ~300 sq. ft. Pilot = 18 stores 28

29 LabCorp at Walgreens As Walgreens becomes a Neighborhood Health Destination we are testing a partnership with a global leader in laboratory services, LabCorp. LabCorp offers a full lab menu including Occupational Testing Services 93% NPS notes an extremely positive patient reaction The LabCorp at Walgreens store will occupy ~300SQFT. By spring 2018, there will be a total of 15 locations in spread across the United States. 29

30 Optical Services Develop a consumer centric optical care service as part of a neighborhood health destination that integrates with other health services and tests a partnership with a global leader in optical services ~800 sq. ft. Pilot = 10 stores 30

31 Walgreens Optical Staffed by independent licensed Optometrists who provide comprehensive eye exams screening for high blood pressure, diabetes, and high cholesterol for only $55 per exam. Walgreens Optical sells frames, lenses, and contact lenses at low, transparent prices. The Walgreens Optical store is approximately 800 SQFT, and is positioned near pharmacy and other healthcare services to maximize care coordination By spring 2018, there will be a total of 10 locations in the Chicagoland market 2017 Walgreen Co. All rights reserved. 31

32 2016 Walgreens Boots Alliance, Inc. All rights reserved. Balance Rewards for healthy choices Loyalty rewards are offered to consumers for tracking their own health activities Balance Rewards product Points earned through healthy choices such as: Tracking exercise, body weight, blood glucose, blood pressure and quitting tobacco Points redeemed for eligible purchases in-store and online Automatically connect to Fitbit, MyFitnessPal, Apple Health, Google Unprecedented engagement +200M total miles walked 70% of members remain engaged after 12 months +80K diabetics in program +1.2M participants & +1M connected devices 32

33 Focusing on three core chronic disease prevention pillars Get Fit Eat Right Manage Health Get Fit will help individuals address and overcome their personal barriers to physical activity. Points with wearables Digital Health Assistant from WebMD Social support network Fitness articles Eat Right will utilize digital coaches to help consumers make healthy eating choices. Points with wearables Digital Health Assistant from WebMD Social support network Healthy eating articles Manage Health will help consumers manage and prevent diseases through coaching and rewards. Smoking cessation Digital Health Assistant from WebMD Social support network Pharmacy Chat coaches Balance Rewards Loyalty Platform 33

34 Balance Rewards for healthy choices Points act as incentives for setting goals and completing healthy activities 250 points / 1 st goal 20 points / daily weight log 20 points / blood glucose test 250 points / device or app linked 20 points / blood pressure 20 points / daily log 20 points / mile Points may be limited per the terms and conditions of the program. Information provided to Walgreens online is covered by the terms of our Online Privacy and Security Policy and the terms and conditions of Balance Rewards. Personally identifiable information is not covered under HIPAA or the Walgreens Notice of Privacy Practices. For full program terms and conditions, visit Walgreens.com/healthychoices Walgreen Co. All rights reserved. Confidential and proprietary information. 34

35 Balance Rewards outcomes 2015 Walgreen Co. All rights reserved. Confidential and proprietary information. Points may be limited per the terms and conditions of the program. Information provided to Walgreens online is covered by the terms of our Online Privacy and Security Policy and the terms and conditions of Balance Rewards. Personally identifiable information is not covered under HIPAA or the Walgreens Notice of Privacy Practices. For full program terms and conditions, visit Walgreens.com/healthychoices. 35

36 Nonadherence cost 2016 Walgreens Boots Alliance, Inc. All rights reserved. Medication non-adherence is a costly problem Omni-Channel Approach Yields Better Results Digital Tools improve adherence, and Walgreens offers these tools on the Walgreens app ~$300 Billion In the U.S. Walgreens offers refill by scan, text, and from a digital account $106 Billion $100 Billion Adults with diabetes, hypertension or dyslipidemia Of medicationrelated hospitalizations Drug Adherence has increased with refill reminders resulting in: +2.59% increase in adherence days of increased persistence 1. New England Healthcare Institute. Thinking outside the pillbox. Published August Accessed June 15, Nasseh K, Frazee SG, Visaria J, Viahiotis A, Tian Y. Cost of medication nonadherence associated with diabetes, hypertension, and dyslipidemia. Am J Pharm Benefits. 2012;4(2):e41-e Phrma. Improving medication adherence is key to better health care Published January Accessed June 15, 2015.

37 2016 Walgreens Boots Alliance, Inc. All rights reserved. The opt-in Digital Health Advisor helps members Your set Digital goals Health Advisor Members receive content and access live pharmacy staff 24/7 via online/mobile chat > 125,000 members in the program Nearly 140,000 set exercise goals Nearly 120,000 people set stress and mood goals > 160,000 set weight and nutrition goals And 30,000 goals were set for chronic conditions Our Goal Completion Rate is 27%, and WebMD s book of business is 7% Source: Walgreens& WebMD Quarterly Review 6/7/

38 2016 Walgreens Boots Alliance, Inc. All rights reserved. Omni-Channel Approach Yields Better Results Omni-Channel Approach Yields Better Results 3% in Adherence (PDC) and 3% in healthcare spend Source: Michael S Taitel, Ph.D. 1 ; Osayi E Akinbosoye Ph.D., PAHM 1 ; James Grana, Ph.D. 1 ; Catherine Macpherson MS, RD Walgreen Co., Deerfield, IL. Improving Medication Adherence and Healthcare Outcomes in a Commercial Population Through a Retail Pharmacy Chain. Poster presentation at the AMCP Nexus 2015, Orlando FL. 7 38

39 do we plan ahead or deal with the aftermath 39

40 Walgreens Vision To be America s most loved pharmacy led health, well-being and beauty company 2017 Walgreen Co. All rights reserved. Confidential and proprietary information. For internal use only

41 Sample image thank you 41