HealthTech “Arms Race” Is Heating Up Among Retailers

Major retailers with healthcare segments, such as CVS, Walmart, Walgreens, and Amazon, are currently scaling up their plans and signing big-ticket M&A deals to mark their presence in the shifting healthcare landscape. These “nontraditional players,” as industry experts have dubbed them, in fact have the potential to comprise 30% of the projected $260 billion U.S. primary care market by 2030, according to a report from Bain & Company. They will, however, be competing not as a group, but as individual entities with their eyes on the same prize of market dominance.

Walgreens’ most recent deals for CareCentrix and Summit Health+CityMD put the onus on its direct competitor CVS to step up with its own acquisition of a primary care provider, firming up its plan to buy home health and technology services company Signify Health for a whopping $8 billion.

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Meanwhile, Walmart has amassed a healthy collection of health centers, with 32 spread across Texas, Illinois, Georgia, Arkansas, and Florida. Many of the locations exist as attachments to the company’s flagship Supercenter stores.

The recent maneuvers from Walgreens signals an ambition to transition itself into a "dominant entity in the overall healthcare services ecosystem," according to an expert in the space. It is putting itself up against the likes of Walmart, which has a strong presence in the proprietary urgent care center/health clinic game.

"They're going to take some business away from urgent care centers,” said Natalie Schibell, vice president and research director at Forrester. “I'd be very worried if I were them. I think this is the first of many steps and acquisitions to essentially take over primary healthcare by the retail health industry and to move into more preemptive versus reactive care.”

Going forward, Schibell believes, each of these retail healthcare companies will be targeting "well-established primary care clinics that have a large volume of providers across the country."