Move is latest step in retail, telehealth, venture capital competition with physicians.
Pharmacy chain Rite Aid and health care company Homeward have announced a joint venture to provide comprehensive care for patients in rural areas of the United States.
Beginning this summer, Rite Aid pharmacists will introduce Medicare-eligible customers to Homeward’s clinical services and will host Homeward mobile care units at store locations in rural Michigan, where the company has 260 stores, according to plans announced this week.
The companies said they have a goal to expand to additional markets nationwide.
Based in San Francisco, Homeward in March announced the company was launching with a $20 million investment to become “the first comprehensive provider to take on full risk in rural markets.” Rite Aid is based in Camp Hill, Pennsylvania, and has 2,451 retail stores across 18 states, according to the company.
Starting in the third quarter of 2022, Homeward will provide in-network services, including primary care and specialty care beginning with cardiology, for patients covered by Medicare and Medicare Advantage plans. The company announced care teams will use in-person and virtual visits, in mobile clinics or patient homes, and set aside the fee-for-service model and use a value-based, total capitation model.
The announcement marked the latest big-name venture with companies banding together to blend primary care medicine with retail outlets, technology, and venture capital, apart from traditional physicians’ practices.
Primary care physicians predicted such increased competition would be the fourth-greatest challenge of 2022, according to Medical Economics’ year-end survey from 2021.
The business developments leave primary care physicians “in a bind.”
“Not only do retail and other alternative care settings steal patients away, but they take mostly the lower-complexity cases, depriving practices of easier revenue and leaving physicians to deal with more complex, difficult cases,” according to the Medical Economics survey report.
The list of examples is growing:
Homeward and Rite Aid’s joint announcement restated problems already known in the health care industry: 60 million Americans live in rural areas, which have fewer doctors than urban areas. Primary care physicians there are aging, with 25% age 60 or older, compared to 18% in urban areas, according to Homeward, citing a study by the New England Journal of Medicine.
Rural areas also have lost hospitals. Homeward claimed at least 163 closures since 2005, and there may have been up to 181, according to figures Homeward cited from the University of North Carolina.
“To date, much of the innovation in healthcare has been applied only to urban populations, leaving rural populations saddled with widespread hospital closures and physician shortages, both of which exacerbate health disparities, significantly poorer clinical outcomes and higher total costs,” the announcement by Homeward and Rite Aid said.
Schneider and Rite Aid President and CEO Heyward Donigan expressed optimism about their roles in the future of rural health care, in the companies’ joint announcement this week.
"As we rearchitect health and care for rural Americans, we must consider the specific needs of millions living in these communities and so-called healthcare deserts. In these areas, we can't assume that 'if you build it, they will come,’” Schneider said in their news release. “Instead, we're creating convenient opportunities for care within the daily lives and routines of rural Americans.
“Rite Aid is a highly recognized and trusted pharmacy services company with rural locations that serve many thousands of people every day,” Schneider said. “Through our partnership, we'll be able to connect individuals to our services as we improve access to critical, frontline services in these communities."
"Rite Aid is deeply committed to improving the lives of our customers with expanded pharmacy and healthcare services in underserved rural communities," Donigan said in the news release. "We are proud to support the innovative work that Homeward is doing to introduce a new, hybrid care model that will play a critical role in our customers' health journeys."