Healthcare Turf

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Walgreens (WAG), the country’s largest drugstore chain, is poised to expand even further into healthcare. At Walgreens’ annual shareholder conference, company officials talked about a new educational program for patients with chronic and complex diseases, and even mentioned the possibility of a Walgreens role in the emerging accountable care organizations. Until recently, most retail clinics have confined themselves to minor acute care. Now, however, Walgreens and some other outlets are beginning to branch into chronic disease care, as well.

Questions:

1.  According to Terry, what will Walgreen’s lower operating expenses translate into?  In other words, what limitations of this expansion are at issue?

2.  Who is Walgreen’s competition in this field?  What trends in healthcare policies do you think have prompted their latest moves and acquisitions?

3. Look at Walgreen’s Annual meeting press release.  What is the company’s free cash flow and what has that allowed them to do?

Source:
Terry, K. (2011). Walgreens Eyes Further Expansion Into Healthcare Turf. Good!, BNET.com, January 18 (Retrievable online at http://www.bnet.com/blog/healthcare-business/walgreens-eyes-further-expansion-into-healthcare-turf-good/2378?tag=mantle_skin;content)

Staff. (2011) Walgreens Reviews 2010 Performance Progress and Future Opportunities at Annual Meeting, Fierce Healthcare.com, January 13 (Retrievable online at http://www.fiercehealthcare.com/press-releases/walgreens-reviews-2010-performance-progress-and-future-opportunities-annual)