Retailer Walgreens announced Tuesday that it is partnering with technology company Pearl Health to help primary care providers engage in value-based care.

Deerfield, Illinois-based Walgreens is part of the U.S. Retail Pharmacy and U.S. Healthcare segments of Walgreens Boots Alliance. It has nearly 9,000 retail locations across the U.S. New York City-based Pearl Health works with providers to help them shift from fee-for-service payment models to value-based care by using its technology to identify the patients who need the most attention. It then provides insights on how to improve care and lower cost.

Through the partnership, Pearl Health will work with primary care providers by offering its technology and data insights to help them better their care. Walgreens is then providing prescription fulfillment, medication adherence, immunization and diagnostic testing services. In addition, Walgreens offers care transitions to the home through its ownership of CareCentrix. 

To start, the companies are focusing on providers caring for members in the ACO REACH program, according to Steve Wogen, vice president and chief growth officer at Walgreens Boots Alliance. The program is an alternative payment model from CMS that helps primary care physicians transition to value-based care.

The partnership with Pearl Health is meant to complement Walgreens’ majority ownership of VillageMD, a value-based primary care company.

“VillageMD today buys physician practices and then runs and manages those practices,” Wogen said in an interview. “What Pearl will be doing is extending in communities where VillageMD does not exist today and instead of actually acquiring physicians, we will just partner with primary care physicians in new geographies that VillageMD is not in so that we can reach more physicians and more patients faster.”

Part of why Pearl Health chose to work with Walgreens is because of its Rx capabilities, said Mike Kopko, CEO of Pearl Health.

“To have one of the largest drug distributors in the world as your partner, it’s tantamount to a dream come true when you’re starting in value-based care,” Kopko said.

Wogen added that the companies’ services work well together.

“[Pearl’s] focus is tech, our focus is on healthcare services,” he said. “They’re not in the healthcare services business. They rely on the physician to act on their insights. So having the physician plus Walgreens acting on those insights can drive lower costs and better outcomes faster.”

Wogen declined to share the business model of the partnership.

One industry expert said the move has some serious benefits for Walgreens. It helps the company “diversify into alternative payment models which in return reduces their overall reliance on fee-for-service volume,” said Kate Festle, director of healthcare and life sciences at consulting firm West Monroe.

“Pearl has seen a lot of growth in its provider and patient panels,” Festle added in an email. “Pair that momentum with Pearl’s analytical ability to identify patients who can benefit most from care management interventions, and it’s a no-brainer why Walgreens wants to partner: Pearl brings the patient population and care management platform and Walgreens brings the medication management infrastructure to help close care gaps.”

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