Kroger enters in-store value-based primary care market
Kroger Health has partnered with Better Health Group to offer value-based primary care to seniors.
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The Kroger grocery store chain, which as Kroger Health operates over 2,200 pharmacies across 35 states, is partnering with Better Health Group to offer value-based primary care to seniors enrolled in Medicare.
This marks Kroger's and its The Little Clinic's entrance into value-based care.
Better Health Group will manage all aspects of primary healthcare through value-based, primary care for seniors on Medicare and Medicare Advantage plans.
The care model will kick off at select Kroger stores in the Atlanta area. The retailer has already begun enrolling seniors and will offer preventive care and personalized attention from a primary care provider, according to Better Health Group.
Based on the success of the program, Better Health Group and Kroger will launch the senior-care offering in other markets and in other Atlanta-area Kroger stores throughout 2024.
WHY THIS MATTERS
The move reflects Kroger Health's desire to join the booming sector of senior-focused primary care, where Better Health Group is already established, according to a statement from the companies.
Better Health Group's value-based care model emphasizes frequent contact between doctors and their patients to identify diseases early when they're easier to treat and to carefully manage chronic conditions. The approach also encourages regular health screenings and medication adherence.
Better Health Group applies the same model at its 162 company-owned senior medical centers and at primary care practices of its 1,200-plus affiliated providers.
Better Health Group, formerly known as Physician Partners, was founded by physicians in 2016. It created a value-based primary care physician group and managed service organization.
Kroger operates 2,750 grocery retail stores in 35 states.
THE LARGER TREND
The business model of pharmacy companies entering into primary care is not new in the retailization of healthcare. The fast-food model approach offers consumers convenience and accessibility.
Hospitals and physician practices are getting direct primary care competition from CVS, Amazon, Walmart and others. Many are capitalizing on the growing senior demographic and market share of Medicare Advantage plans.
However, Walgreens Boots Alliance, which has run into financial headwinds, announced plans in October to cut more than $1 billion in 2024 and to shutter 60 healthcare clinics in unprofitable markets. This was after the company reported fourth-quarter operating losses of $450 million, compared to $822 million operating losses during the fourth quarter of 2022.
Moody's Investors Service recently downgraded the pharmacy operator's senior unsecured ratings to Ba2, non-investment grade, according to Seeking Alpha. The two-notch downgrade from the previous long-term rating of Baa3 (investment grade) reflects the company's high financial leverage, poor interest coverage and weak free cash flow, all of which would last 12 to 18 months, the report said.
On Dec. 12, Walgreens' stock rose 2% amid a report that it's restarting talks on a possible sale of the UK-based Boots drug chain, Seeking Alpha said.
The company has been having early discussions about ways to separate the Boots chain, which is valued at about $8.8 billion, the report said.
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
