Rae Woods (00:02):
From Advisory Board, we are bringing you a Radio Advisory. My name is Rachel Woods, you can call me Rae. In the last episode of Radio Advisory, we talked all about disruptors and at the time we focused on retail pharmacy because they sit in the middle of a lot of the competition that we're seeing. They're certainly disruptive, especially if I think about incumbent health systems, but of course they're not immune to disruption themselves. So today I wanted to bring you a conversation with one of those retailers. I've brought Dr. Sashi Moodley, the Chief Clinical Officer of Walgreens Health. Sashi, welcome to Radio Advisory. Have you ever been on a podcast before?

Sashi Moodley (00:50):
I have not, no. This is my first time.

Rae Woods (00:54):
First time. Well, this is the best way to have a casual conversation, get to share your thoughts, get to share Walgreens strategy. I'm so happy that you're here.

Sashi Moodley (01:02):
Yeah, thanks for having me. I'm excited.

Rae Woods (01:18):
Tell us a little bit more about you. I'd love to know your background. What brought you to your current position at Walgreens and maybe what you and Walgreens saw in each other?

Sashi Moodley (01:28):
Yeah, so I'm an interim medicine physician by training and joined the Walgreens team just over a year now, as the chief clinical officer for our new business segment that we're calling Walgreens Health. Prior to joining Walgreens, I was at [inaudible 00:01:42] where I served as a National Vice President Medical Director over our care delivery companies, CareMore and Aspire and was in charge of clinical innovation and population health at those companies, and also practiced as an interim medicine physician. Generally I'd been involved in transforming healthcare to more innovative models, especially in the value based care space. So that's some of the work I did at CareMore and really focused around home based care models and how those models can be used to go after some of the sickest of the sick in an innovative way and get them the care that they really need.
For me, this opportunity was very exciting because when I made this switch over to Walgreens, we were still in the height of the pandemic and it was just incredible to see the impact Walgreens was having across the country in vaccinating and testing the public. I think we're up to 60 plus million vaccines administered to date and over 30 million tests and that's skill.

Rae Woods (02:38):
Wow.

Sashi Moodley (02:38):
Yeah, it was just really impressive to me and as I thought about where I wanted to take my career, this was really appealing in terms of having an impact at scale across the country.

Rae Woods (02:49):
You used the term Walgreens Health. This new kind of company, this new part of the Walgreens enterprise that I'm not actually sure all of our listeners understand. People think of Walgreens and they think of that vaccine clinic, they think about something that's certainly accelerated and grown in the context of COVID 19, but they think of it as a place to get their drugs, be a little bit of a corner market, maybe get a vaccination, but that is very different from the vision of Walgreens Health. What is Walgreens Health mean right now, and what's the vision for the future?

Sashi Moodley (03:26):
So Walgreens Health was announced back in October of 2021 and it really allowed us to realize our vision of becoming more of a healthcare destination. To your point, I think historically we've done some of the things you've talked about, vaccines and testing, and that'll still be a core part of our strategy, but there's a lot more that we can do. I think COVID really demonstrated the value that we bring to the healthcare ecosystem more broadly across the country. So Walgreens Health is the new growth engine of the company where a lot of our newer assets that we've invested in or that we're building our position. So that includes for example, Village MD, which is a primary care company that we invested in and they're going to be building out primary care clinics across our stores, across the country. There's also some other companies that we have under that umbrella like Carecentrix that focuses on patients during the post acute care period and so it really is an effort for us to bring together a portfolio of companies to help manage a patient and orchestrate that care journey for them.

Rae Woods (04:27):
And to be that healthcare destination.

Sashi Moodley (04:30):
Yes.

Rae Woods (04:30):
I want to talk about some of the specific investments that are underneath the umbrella of Walgreens Health. And you mentioned one of them already, which is Village MD. You all are the first national pharmacy chain to offer full service primary care with both PCPs and pharmacists in the same location. I think you have a goal of getting to, what is it, 200 clinics by the end of 2022?

Sashi Moodley (04:52):
Yeah, that's correct. 200 by the end of 22, and we've also said that we want to get to a thousand at scale.

Rae Woods (04:57):
Wow. So what does the Village MD partnership and the investment in primary care do for that vision for Walgreens Health?

Sashi Moodley (05:05):
I think it gets back to where we want to go and what traditionally we've done. I think it gets to the point of becoming more of a longitudinal partner, being that kind of healthcare destination, not just for more transactional type services, but really that longitudinal relationship based care. So that's what investing in primary care allows us to do, and when you integrate the pharmacy model into primary care, we think there's a ton of value that can be created. Something that I learned when I joined here was the power of the patient pharmacist relationship and how much trust there is there. It's something that I didn't actually recognize until I came to the company.

Rae Woods (05:44):
Well, as a physician, you often think the relationship lives with me and it's the patient doctor relationship, but you're describing that people can have deep trusting relationships with other members of the care team, including the pharmacist.

Sashi Moodley (05:57):
Exactly the patient PCP relationship is extremely strong, but I didn't recognize that relationship with a pharmacist and how important that was. Now I hear stories all the time of how patients tell our pharmacist things that they don't even tell their primary care doc, and we have seniors who come to our stores 10 to 20 plus times a year to meet with their pharmacist, to pick up their medication. That's a lot more engagement that they're getting with their primary care doctor. So it's no surprise that they know these pharmacists so well and the pharmacists know these patients so well, as well. That we think by combining that pharmacists model with the primary care model, there's a ton of value that we can create and positively impact the patient.

Rae Woods (06:41):
It makes sense for this longitudinal relationship. Let's not just meet with somebody once or twice a year, we want to meet with them 10 plus times. But it does strike me that these are physical sites, these are in person primary care clinics. I know that you're targeting those, or I think, at least a majority in medically underserved areas, but this is happening at the same time that the industry is pushing more care closer to the home, not just at say a co-located facility, but to digital solutions, to more home based care, to more remote patient monitoring. What's the balance of in person care and virtual care for Walgreens Health?

Sashi Moodley (07:20):
So even if you take a step back and look at Village themselves, they have a very robust home based care program. So I think we typically think of them as the brick and mortar facility based care, but they have a robust team that sees patients, often those patients that are too frail to come in to the clinic, they see them in their homes. When you consider the portfolio of assets that we have under Walgreens Health, we have a company that's really focused on home based care, which is Carecentrix and that transition from when a patient moves from the hospital to the nursing facility, to the home, they're really focus on the patient during that episode. So we do see the care model very broadly. It's not just that in person component, but it is also virtual care, and in the home. On the virtual care front, we are making investments in building out our capabilities, whether it's for remote patient monitoring or telemedicine, to be able to incorporate that into the care model. So it's definitely all of the above.

Rae Woods (08:18):
Well, it sounds to me like the business strategy is... Walgreens is basically trying to rebuild the delivery system and is looking to partners that do different aspects of care delivery very well, whether it's that longitudinal patient relationship, whether it's the brick and mortar, whether it's the virtual and the remote patient monitoring and they're trying to say, "What companies, what partners can we bring under this umbrella so that we can rebuild the delivery system?"

Sashi Moodley (08:47):
If you look at our mission, we want to be the leading partner in reimagining local healthcare. We know we're not going to do all of this ourselves. We're looking for partners to help us orchestrate that journey for the patient. But what do we have that we can offer that's really differentiated? 9,000 locations across this country. Close to 80% of the population lives within five miles of one of our stores and millions of people interact with us on a daily basis. So it's an incredible platform for us to be able to engage patients and impact their care beyond what we're doing now. But we know we're going to have to work with partners to realize that vision, we're not going to be able to do everything ourselves.

Rae Woods (09:28):
So you mentioned Village MD and you mentioned Carecentrix. There's another partner that I know that you work with, and I'm not sure that I understand the distinction between it and some of the other assets. That is the Health Corner, what is the difference between a Health Corner and say a Village MD clinic?

Sashi Moodley (09:45):
So the Health Corner is something that we're building organically. It's not an external partner. It's something internal that we're building. To understand the Health Corner, you need to look again at our scale, 9,000 stores. With Village, what we mentioned is that we're going to build out a thousand locations, that still leaves 8,000 stores where we're not going to have primary care, but that doesn't mean we can't do more than what we're doing today in the healthcare services space. So the Health Corner is a channel of engagement for us to deliver additional clinical programs through, and what we've said is we want to build up to 3000 of these across the country because we're a big company and to be able to move the needle, we know that we're going to have to leverage our footprint at scale to be able to do that. So the Health Corner, it's core to our strategy, but what I would say about the Health Corner is that the way that it looks today, it is not going to be the model that it has to be as we scale it.
Because again, it's a channel of delivery. So what really is important is what programs are we delivering to which patients and that'll determine what the Health Corner looks like, just like we had talked about the virtual space in the home, it's a channel of delivery. More importantly is what are we trying to deliver through that channel? And that'll determine who sits in the Health Corner or what the Health Corner actually looks like from an experienced standpoint.

Rae Woods (11:05):
But it's interesting to me that it also is a sentiment of what is Walgreens not doing. You did not say we are going to build, establish, create 9,000 Village MD locations. The goal is a thousand, which is substantial, and then it's, "What else can we do to fill gaps in the other 8,000 stores?" Maybe it's something that looks a little bit different. That's a deeper version of that pharmacist relationship that has a technological backbone, but doesn't mean you're building 9,000 primary care offices.

Sashi Moodley (11:35):
Yeah, exactly. If you look at where we're building most of these sites and at least 50% of them are going to be built in medically underserved area.

Rae Woods (11:42):
That's right.

Sashi Moodley (11:42):
So when you look at our footprint, not all of them would justify having a full primary care service in them. But again, that doesn't mean we can't do more in those sites to help patients along their care journey. We're not trying to compete with primary care, with the Health Corner. It's really around providing wraparound services to complement the services that those patients are already getting from their primary care physicians. Because we know that currently, if you look broadly, patient outcomes and quality isn't improving at the same rate at which costs are going up. So there is a tremendous opportunity there to provide some wraparound services and complimentary services to really get patients on track from a disease management perspective.

Rae Woods (12:23):
This all sounds so exciting, but can I tell you what makes me nervous about this?

Sashi Moodley (12:29):
What's that?

Rae Woods (12:30):
What makes me nervous is how you're actually going to integrate all these different delivery platforms, because you are talking about building this omnichannel experience that is remaking how we deliver and scale healthcare. There is certainly benefit to building some on your own, buying some, partnering. The question is how do you actually connect it all together to make it a seamless experience for the patient?

Sashi Moodley (12:57):
That is a crucial part of our strategy, and I think that really gets back to the tech infrastructure that we are building. It's not that we want to have everything integrated in a close system. I think we're much more trying to orchestrate the journey for the patient and allowing them to have choice, but allowing that experience to be seamless so that information is shared across the different portfolio companies, or even if they're working with their own primary care doctor and we're providing wraparound services, that information gets shared by directionally. So that's an important call out, but it also is an area that we're investing in to build out our capabilities to ensure that communication flows appropriately.

Rae Woods (13:43):
Is the goal to do this for all patients, or are you trying to specialize and focus on a very specific patient population? You talked about the journey to value based care and working in chronic disease management, that's certainly something that connects to your background. Is the goal to provide these wraparound services for everyone, or are you really trying to specialize to a specific kind of patient?

Sashi Moodley (14:08):
I think it really depends on the service. So of course there's things that we've historically done and will continue to do like vaccines and testing that can be broadly applied to anyone. But as you think about chronic diseases, for example, of course there's a segment of the population that that affects and where we think we really have an opportunity is with seniors, because those are the folks that are, again, coming into our store, 10 to 20 times a year to pick up medications, to talk to our pharmacists. Those are the folks that really have that tight relationship with our pharmacist and trust them and so they're also the ones by definition because they're picking up all these medications, the ones that have chronic diseases. So that's an area that we think we really have an opportunity to impact because of our engagement and trusted relationship. So most of those wraparound services around chronic disease management will be built focused around that senior population.

Rae Woods (16:01):
You mentioned something earlier that really struck me. You said, we're not trying to compete with primary care and even mentioned a patient might still see their PCP and Walgreens Health is just providing complimentary wraparound services. Who is Walgreens biggest competitor?

Sashi Moodley (16:19):
Of course, you think of CVS.

Rae Woods (16:20):
Sure.

Sashi Moodley (16:21):
As the other major retail pharmacy player in this space, and of course they have a similar footprint to us. I would say the difference is we don't necessarily have a PBM that we're attached to or a health plan. So while they are a competitor, I think we are payer independent and we can work with any payer out there as opposed to a [inaudible 00:16:45] where it's much more of an integrated model. The other competitors out there, it is broad. If you look at the health payers out there that have created diversified groups like Anthem or United, they also have a strategy to orchestrate the journey for the patient across that care continuum.

Rae Woods (17:06):
That's exactly what I was going to say, and we talk about this a lot actually on this podcast, that more and more entities are getting into the care delivery space and frankly are trying to partner with or acquire physician groups. We certainly know that retail companies are doing that. CVS is maybe one example, amazon obviously just made a enormous investment in One Medical. CVS also I think announced just recently that they've got their eyes set on more primary care. Exactly what Walgreens Health has been focused on. You started to get to this, but if Amazon and CVS and health plans and other medical groups are all setting their sites on getting into more value based care and employing physicians and acquiring groups to do that, how do you differentiate yourself?

Sashi Moodley (17:56):
The healthcare market is extremely large. It's a 3.5 trillion market and there's a shortage of providers so it's not that we're going to saturated market with a primary care group and competing. As we had talked about 50% of these sites are going to be built in medically underserved areas. I think the other lens to look at this is through the lens of interdisciplinary care and especially what I mentioned on wraparound care, which is involving the pharmacist in that model. I think there's a huge untapped potential there. If you think about the 30,000 pharmacists we have across the country and the impact they can have on patients beyond what they're doing now, especially as we make investments in automation that will then free up their time to spend more time on patient care. It's a huge component of the care delivery model. It hasn't been used in the past, and I think we can add a ton of value there, especially when you combine that with a primary care model, we can expand the role of the pharmacist and the delivery of care for a patient.

Rae Woods (18:58):
What strikes me about this conversation is that you've been really thoughtful about thinking about collaboration and thinking about partnership. But let's be honest, you also have to do that while thinking about competition and thinking about competing in an incredibly crowded field, how do you think about balancing those two things? Staying ahead of the competitors, the Amazon's, the CVS's, the health plans, et cetera, but also knowing, and I'm going to quote you back here that you can't do it all yourself and you need to go to partners to fill some of these gaps.

Sashi Moodley (19:33):
I think it starts by recognizing where we have a right to win and where we're truly differentiated. That's what we bring to the table. I get back to the engagement and trust piece because practicing in healthcare now for several years, especially in value based care models, those are two of the most important factors in my mind because you could have the best care model in the world, but if you can engage a patient, it doesn't matter. In value based care, a lot of what you're trying to do is impact total cost of care and influence a patient's disease trajectory so you prevent complications from occurring. That requires the patient to actually want to work with the clinician and listen to the clinician and take their advice. So it's all about trust, and so that's what we really bring to the table is the engagement and trust. But when you think about other parts of the care model, we would probably look to partner on those other areas where we don't necessarily have a right to win, but we know we need that as part of the overall care model. So we are being very deliberate and thoughtful about what we do ourselves versus where we partner or acquire a company to fill in that gap for us.

Rae Woods (20:40):
What's the biggest thing that you need from those partners and other stakeholders, where you think Walgreens just does not have the right to win here? What's the biggest thing you need from your partners?

Sashi Moodley (20:50):
Well, I think it's just an open mindedness to thinking about how they could work with us. Historically, retail care has traditionally focused on some of the lower acuity services or more transactional services. I think folks may have anchored themselves to that vision, but I think as we move to the future, especially as we think about playing more in value based care models, there's a ton of value that we can unlock and grow the pie for everyone. So I think it starts with just being open minded around how we can leverage our 9,000 stores, our incredible footprint, proximity to patients, the engagement that we have to accelerate some of their models that they may have and also how we could co-create things together. So that's where I would start is just thinking of us in a new way that historically they may have not considered us in the past.

Rae Woods (21:41):
But not even just thinking of you in a new way. If I think about, for example, a health plan partner, you need them to reimburse for the services that would be provided at a Village MD clinic or at a Health Corner, and that is something that you absolutely need from your partners and some of these other stakeholders in healthcare in order to be successful to get down that path to value based care.

Sashi Moodley (22:06):
Definitely. Health payers, health plans, of course a crucial part to our overall success here and as our health systems, of course we don't own any hospitals nor do we intend on acquiring the hospitals. So as we think about that care journey for a patient, we know there'd definitely be gaps in there that we're going to have to find partners to fill.

Rae Woods (22:27):
I'll be honest, I work with a lot of traditional incumbents, traditional health system leaders that look at Walgreens Health and feel threatened. The word disruption is absolutely the word that comes out of their mouth first. So what's your stance in what you offer them to make them feel comfortable partnering with you, even though they absolutely see you as a competitor?

Sashi Moodley (22:53):
Our strategy really is around trying to grow the pie. It's not really trying to just capture more value of the existing pie. When I think about the models that we can bring with our pharmacists, and again, the engagement that we have, those are things that a lot of other health systems or payers out there just don't have. That's what we can bring to the table and create more value together. So while they may see it as being competitive, if you're really open to it, and you think about it, especially from a value based lens, who is well positioned to really engage with these patients and move the needle from a disease management perspective and bring down the total cost of care. You'll see that we are very well positioned to be do that and by involving us in your care model and collaborating with us, we can combine drive down the total cost of care, which leaves more savings and upside for all partners.

Rae Woods (23:49):
Where do you think Walgreens can or maybe should be the most disruptive to the traditional way that care delivery is done?

Sashi Moodley (23:58):
There's a shift, increasing consumerism right now, COVID, of course accelerated this trend. I think there is a push to decentralize the way healthcare is being delivered. I think the days of having a patient drive 20 miles to go to a certain health center to get their labs drawn as a thing of the past, and it should be. It's so disruptive to a patient's daily living to be able to fit in some of their healthcare needs and it shouldn't be that way. Where I think we can be really disruptive is in providing local healthcare at scale. Again, I get back to our footprint, 9,000 stores, 80% of the population lives within five miles. There's a ton that we can do with those locations. If you think about them as spokes, so 9,000 spokes, we can be a spoke to any hub and if you look through our footprint in that lens, you'll see that there's a ton that we can do, and it doesn't have to just be vaccines or testing. It can be anything that we need to do to solve the problem in that local market for the healthcare delivery system.
So that's the lens that I look through at it is that we've got 9,000 locations, there are places for people to come to, but there are also places from which we can deliver care into the community from, almost as fulfillment centers. So from that last mile of healthcare, which I think is the crucial piece, there's a ton that we can do with our platform and that's where I think we're going to be the most disruptive.

Rae Woods (25:28):
But you are also competing in a pretty crowded field, and we talked about some of the direct competitors to Walgreens Health, and there are plenty others that we haven't actually talked about yet. Are there other kinds of disruption that you're worried about, or maybe that you're envious of, that you wish that Walgreens Health could be doing or have on your own horizons?

Sashi Moodley (25:50):
No, I think you had mentioned this earlier, but we saw during COVID the explosion of virtual care. So while that is a threat, are folks still going to come to get care in person, or are they just going to get their care in the future through telemedicine? While we did see explosion of virtual care, I think we're starting to see it plateauing now, I don't think it's ever going to go back to the rates of which it was pre-pandemic, but I still think there's going to be a place, an important place for in person care, especially among seniors and those with chronic diseases. So while I do think the virtual care companies out there are a potential competitor to our model, I think there's always going to be a space for in person care, especially the population that we're going after from a value based lens, which is those with chronic diseases, and especially those seniors where in person care and relationships are still very important. I think it's still going to be there, but I think we'll see where virtual care ends up settling down after the pandemic... Hopefully it's behind us where virtual care will end up being in terms of the proportion of visits that patients utilize it for versus traditional in person care.

Rae Woods (27:05):
You mentioned earlier that you just finished your first year at Walgreens Health. I'm curious, what is the biggest thing that excites you about the company's future?

Sashi Moodley (27:15):
It was a visit that I did last year, I think was in October or November. I visited one of the Health Corners that we just launched here in California and while waiting at the back of the store, I met a couple that was waiting in line to pick up a prescription. I started talking to this couple and they had mentioned that they'd been coming to the same Walgreens for 10 years or more.

Rae Woods (27:40):
Wow.

Sashi Moodley (27:40):
Even though they had moved, they were living in Orange County and they moved to LA, and I think anyone who knows the LA area, that's not something you'd want to do, drive across town to pick up a medication if there was a more convenient option.

Rae Woods (27:55):
No.

Sashi Moodley (27:55):
So I was very intrigued, why would you do this? The couple explained that they've been coming to this location for yours because they trust the team and they know this team really well. Coming from a more traditional healthcare world, not in the retail side of things, I again, did not realize how important that pharmacist patient relationship is and how much trust there is between the patient and the pharmacist. It's just very exciting for me to think about how we can leverage that at scale, 30,000 pharmacists, 9,000 stores and what the potential here is to impact care delivery beyond what we've been doing, especially as we get more into chronic disease management. So that's something that I keep going back to is that experience of someone driving across town and doing that for 10 years because of a trusted relationship?

Rae Woods (28:46):
Well, let me ask the question in the opposite way. What is the biggest obstacle that you see could get in the way of Walgreens Health plans and how are you thinking about overcoming that obstacle or those barriers?

Sashi Moodley (29:01):
One of the challenges is that we are a very big company. If you step back, we're a hundred billion plus company, Fortune 20 company, whatever we do, we have to do it big and at scale, and we can't just do a couple pilots here and there.

Rae Woods (29:16):
That's right.

Sashi Moodley (29:18):
We're in all 50 states or close all 50 states, if we're not. That means we've got to be able to make some big bets and put our stake in the ground. I think we've already done that under our CEO, Ros's direction. We've made some really big investments and made some bets in primary care or post acute care. So I think we're doing this, but it does get back to that point on, we have to do something at scale, it has to be big. So we've got to be able to move fast. We can't get stuck in pilot mode and do something one or two stores because that's not going to move the needle. We're a big company. We've got to be able to take these models and really grow them and scale them across the country.

Rae Woods (29:58):
Well, before I let you go, I do want to give you a moment to speak directly to our listeners, which frankly span all corners of the healthcare system. They are listening from traditional health systems, from medical groups, we've got payers, we've got life sciences companies, we've got disruptors that listen to this podcast. So I'm curious, what is the one thing that you want to leave our listeners with when it comes to this transition to value based care, when it comes to the future of Walgreens Health, what is the one thing you want our listeners to know?

Sashi Moodley (30:31):
We are embarking on a very ambitious strategy and we think that we are very well positioned here. You have to start to look through the world from a value based care lens to understand the potential that we can unlock. When the value based care space is really around impacting care, reducing total cost of care and providing patient centered care so that you prevent the progression of disease, you prevent complications from happening and we just have an incredible platform to be able to do that. When you look at the engagement we have with patients, millions of people coming through our doors every day, 30,000 pharmacists across the country and you look at the scale of what we were able to do during COVID, over 60 million vaccines administered over 30 million COVID tests performed.
There's a ton of potential here for us to move the needle beyond what we've historically done by using our platform. So the potential is there, and I'm just very excited for folks to understand how our footprint and our assets and portfolio of assets can really move the needle and impact care across the country and really make a dent in how care is delivered in a meaningful way and bring real value to patients across the country.

Rae Woods (31:55):
Well, Sashi, thanks for coming on Radio Advisory.

Sashi Moodley (31:58):
Thank you so much Rae.

Rae Woods (32:04):
Look, I know this episode and last week's episode were all around the context of disruption, but I hope you heard from Sashi himself that Walgreens Health, and I'm sure all of these disruptors, also see themselves as a partner. Frankly, they have to be. So the question for you is how can you work with some of these new competitors in healthcare so that we can get to our ultimate goal of value based care? And when you do that, remember we are here to help. I thought that was good. Yes?