Walgreens' Sashi Moodley on the retail pharmacy's value-based care strategy

Walgreens' Sashi Moodley on the retail pharmacy's value-based care strategy Lydia Ramsey Pflanzer

Walgreens is dialing in its approach to building its healthcare business.

On Oct. 10, the company named longtime Cigna executive Tim Wentworth as its next CEO, bringing in a leader with healthcare experience. Two days later, Walgreens said it plans to make $1 billion in cost cuts — including closing 60 underperforming VillageMD primary care clinics in 2024. As it shuts down brick and mortar care locations, it’s rolling out a new virtual care service in some states later in October.

Over the last several years, Walgreens has put billions of dollars into expanding its in-person care offerings. It owns a large equity stake in VillageMD, and through that invested $3.5 billion into VillageMD’s acquisition of Summit-CityMD, an urgent and specialty-care company. And last year, Walgreens bought home care company CareCentrix.

Last week, Endpoints News spoke with Sashi Moodley, the chief clinical officer of US Healthcare at Walgreens, about how the company’s strategy is evolving, where it’s pushing into digital services and what it believes should still be done in-person. Moodley oversees clinical programs at Walgreens and is focused on finding ways to bring the best of pharmacies into how organizations care for people.

Moodley is betting pharmacies will be a big part of the rise of value-based care, a different way of paying for healthcare based on patient outcomes instead of the number of visits. That’s because of how often patients interact with pharmacies.

“You can have the best care model in the world, but if you can’t engage a patient, it doesn’t matter,” Moodley said. “It only matters if you can engage the patient,” he added.

Pharmacies could play a big role in the transition to value-based care

Before joining Walgreens in 2021, Moodley worked at Anthem (now Elevance) and its care delivery business, CareMore. He’s seeing the industry moving more toward value-based care models rather than fee-for-service. He’s also seeing consumers take a more active role in their health. Moodley said Walgreens can capitalize on those changes.

While a particular patient, say an older American or a person with multiple conditions to manage, might not have a consistent relationship with their health plan or primary care provider, they do tend to have one with a pharmacist.

“We’re really well positioned to take advantage of where healthcare is going,” Moodley said. “Just because of the access we have. We’re in healthcare deserts. We have multiple ways of being able to engage patients, home-based care, or retail space, virtual care.”

One way pharmacies could play a bigger role is by changing the way pharmacies work with health systems. Walgreens currently has relationships with health systems in which the pharmacy will set up shop in a space a particular hospital has available, or the health system will set up a clinic at a Walgreens pharmacy that has space. Moodley said he thinks that relationship could go deeper.

Moodley said there could be a way to manage a patient population alongside health systems, ideally getting paid to provide that better care.

“As we move towards these more value-based care models, if we’re both interacting with that same population, how do we make that relationship much more meaningful so that we can collectively help those patients with their chronic diseases, make them healthier, keep them out of the hospital?” Moodley said.

Betting on virtual care in 2023

Walgreens, in October, is launching its virtual care services, in which people in certain states can access virtual visits for services like prescription refills, urgent care concerns like flu or Covid-19 symptoms, men’s and women’s health concerns and care for conditions like acne and allergies. It’s a similar scope to Amazon Clinic, the virtual service Amazon started offering in 2022. Walgreens hasn’t named the virtual care providers it’ll be working with to power the service.

Already, Moodley pointed out, Boots, a part of Walgreens’ parent company in the UK, has been using virtual care for the past two years. Learning from that rollout, the US-based team wanted to bring virtual care stateside.

Moodley said he sees virtual care as the “secret sauce” that connects all the healthcare services Walgreens offers. Should a patient need a service that requires an in-person visit, Walgreens has that through its work with VillageMD and its recent Summit Health-CityMD acquisition that grew its urgent care footprint.

“We’re really trying to create that integrated experience where we may not be providing all the care, but we can coordinate that journey for the patients,” Moodley said.