A MinuteClinic sign is displayed outside a CVS store in Wyckoff, New Jersey, U.S., on Tuesday, Sept. … [+]
The pandemic and physician burnout may help CVS Health and Walgreens Boots Alliance attract more doctors and other medical care providers to their expanding primary care operations.
Walgreens is already spending another $5.2 billion on VillageMD, an owner of doctor practices and developer of physician-staffed clinics, while CVS last week said it will be acquiring more physician practices as it expands its diversified strategy to grow its primary care business.
The drugstore giants have huge amounts of cash for acquisitions and access to capital should they need it at a time physicians and other medical care providers are looking to larger organizations for support in adapting to the digital age, contracting with health insurers and help hiring staff to smaller practices amid a labor shortage.
CVS last week said the drugstore chain will strive to become the employer of choice for physicians, advanced practice nurses and physician assistants. Such primary care professionals are already part of a major buyout wave among doctor practices and the healthcare staffing industry.
And industry analysts and investment banks see an escalating wave of buyouts as practices cope with labor shortages and the stress Covid-19 and the pandemic have had on healthcare professionals.
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“The resurgence of COVD-19 and Delta variant cases have stressed healthcare systems, creating substantial demand for outsourced staffing providers,” a new report from the investment banking firm Capstone Partners said. “Merger and acquisition activity has proliferated as strategic players consolidate to bolster service offerings and private equity continues to build and enhance sector portfolios.”
VillageMD is regularly scouting the U.S. for potential doctor practice acquisitions. And CVS, which is already known for its MinuteClinics staffed by nurse practitioners, said it will be broadening its strategy into a “nationally-scaled next generation primary care model.”
This will include more “physician-led primary care centers with integrated virtual and home assets,” Dr. Alan Lotvin, CVS Health’s Executive Vice President & President, Pharmacy Services, said during the company’s investor day event.
