Healthcare Reform Good for Some Chains

Discussion
Mar 25, 2010

By George Anderson

Count Safeway and Walgreens among the retailers that expect to do well as
a result of the passage of healthcare legislation by Congress this week.

Safeway
has gained national recognition for its ability to cut healthcare costs using
an incentive-laden system that emphasizes wellness. Now the company has launched
a new subsidiary, Safeway Health, to help other business reduce costs, as well.

According
to a report by Business Insurance, Ken Shachmut, Safeway senior
VP and executive VP of Safeway Health, said, "About the middle of last year,
we decided to try and commercialize our experience. We believe that what we
have is transportable to other employers."

"Under our business model, Safeway gets to share in the savings. We take
no consulting fees," he said. Safeway’s take will be 25 percent of savings
generated over five years.

Walgreens sees opportunities for growth in its drugstore and
clinic businesses as 32 million Americans currently without insurance will
be covered in the future.

Greg Wasson, CEO of Walgreens, said the chain, with
more than 7,100 drugstores and 700 in-store or on-site clinics, expects "to
benefit from that as a provider."

"We’ve said all along that we support the three core tenets of health care
reform: improved quality, greater access to care and lower cost," Mr. Wasson
added.

Jeff Jonas, an analyst at Gabelli & Co., told Crain’s Chicago Business.
"In the long term, the law is very positive for Walgreen. What you get is more
people filling prescriptions, and that means more volume for Walgreen."

Discussion Questions: Where are the greatest opportunities for retailers
to benefit from the new healthcare overhaul legislation passed by Congress?
Will Safeway be able to profit from bringing its health plan to other companies?

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5 Comments on "Healthcare Reform Good for Some Chains"

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Ralph Jacobson
Guest
7 years 8 months ago

Many retailers could profit from this. The Asheville Project started this kind of thinking way back in 1996. The project led pharmacists to develop thriving patient care services in their community pharmacies. Employees, retirees, and dependents soon began experiencing lower total health care costs, fewer sick days, and increased satisfaction with their pharmacist’s services.

Ryan Mathews
Guest
7 years 8 months ago

First of all the President didn’t sign healthcare reform into law, he signed a bill which is primarily concerned with reforming health insurance.

There’s probably a reason that we haven’t seen executives of major health insurance plans tossing themselves out of windows and I suspect that is that they’ve read the bill and see it as a potential windfall.

Ditto for the AMA and “Big Pharma.”

So, who will make money? The same folks that always have.

Is there an opportunity for consulting on ways to exploit new opportunities? Of course.

Mark Plona
Guest
Mark Plona
7 years 8 months ago
Well…. Since industry groups seem to be highlighting benefits that may flow to the dietary supplements and complementary and alternative medicines (CAMs) sectors as a result of the landmark Patient Protection and Affordable Care Act that has been passed by Congress, I would think that would give those in those segments some additional opportunities. That coupled with the fact that the bill makes it more difficult for the mainstream medical community to discriminate against CAMs and is likely to provoke schemes that will promote the use of certain dietary supplements. Also, groups like The Natural Products Association says, “Community health… Read more »
Li McClelland
Guest
Li McClelland
7 years 8 months ago
I can see that some companies may have more impetus/cover now to implement wellness programs and perhaps even add mandates related to weight and smoking upon their own employees. (This was done in the past for such professions as street beat policemen and inflight airline employees but had fallen out of favor as being too invasive.) There may be some positive changes in cafeteria food. But trying to find untapped retail benefits out of this legislation seems kind of a stretch. I expect that when consumer realization of all the new taxes/penalties kick in, when, because of this, even more… Read more »
Roy White
Guest
Roy White
7 years 8 months ago
The healthcare reform bill has placed the provision of healthcare to the American public top-of-mind. It should be viewed by all drug and supermarket retailers as a golden opportunity to provide highly valued services to customers. Drug and supermarket retailers touch nearly every American in the country, many several times a week. They can provide care via mini-clinics and pharmacies. They can provide nutrition and nutrition guidance for the many healthy foods they carry. An earlier comment noted that those chains that are structured for it will benefit. That’s absolutely correct and every drug and supermarket retailer should now review… Read more »
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