Walking the aisles of a CVS drugstore, there are piled papertowels, stacked cereal boxes, and neat lines of nail polish. In theback, there’s the pharmacy.

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For years, that approach has remained essentially unchangeddespite a creeping reality: Every time a customer hits “Add toCart” on Amazon.com, the pharmacy chain’s thousands ofsquare feet of retail floor space get a little less valuable.Meanwhile, the money Americans spend on health services keeps growing.

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That’s why the back of the store is front and center as CVSHealth Corp. gets ready to combine with healthinsurer Aetna Inc.

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The $67.5 billion merger announced Dec. 3 willbring together 9,700 CVS stores and Aetna’s 22 million customers. Acentral plank of the deal is transforming the stores into healthhubs where consumers can get care, pick up their drugs, buy somemilk, and stay out of the hospital.

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“Together, we plan to build an entirely new health-care conceptbased on the principles of making care easier to use and moreaffordable,” CVS Chief Executive Officer Larry Merlo said on a Dec.4 call with investors.

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There are serious challenges to CVS’s proposal. Revamping thestores could cost several billion dollars. The company will have tochange how millions of customers see a doctor or nurse. And it willhave to fight decades of health-care economics and patterns.

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Drab but busy

CVS is already the leader in drugstore-based clinics. At a CVSin Springfield, New Jersey, an unlit MinuteClinic sign in thestore’s window is hard to see from the road after dark. The waitingarea is four plastic chairs pressed up against the store’s backwall, near greeting cards and nail products. There are exam roomsoff a short hall behind.

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Despite the drab look, it’s busy. An hour before closing time,three women were waiting for appointments on a recent Tuesdayevening. A couple who came in with their school-age daughter turnedaway after seeing a display on the check-in kiosk next to thepharmacy, which read: “We’ve got a full schedule today.”

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The doctor is in

CVS has been steadily expanding the number of walk-in healthclinics in its stores.

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While many stores are polished and inviting, revamping otherswill require significant overhauls, and CVS has said it mayredirect some of its $2 billion in annual capital spending to thetask. The company is also testing out vision and hearing servicesin a handful of locations and may eventually offer nutritionservices.

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The Aetna deal offers little in the way of traditionalsynergies, and whether it succeeds will depend on managingcustomers’ health, using in-store clinics and hubs to care forpatients in lower-cost settings or stay on top of costlydiseases.

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As the companies envision it, individuals with a chronic diseaselike diabetes could get blood tests drawn or see a nutritionist ina store while picking up their medication. If they need it, theycould then be guided to see a specialist or told when to return fora follow-up.

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Most CVS clinics now are staffed by a single nurse practitionerat a time. Frances Prado, a nurse practitioner who previouslyworked at MinuteClinics in the Walnut Creek, California, area, saidshe had to do everything from ordering supplies and cleaning up todealing with a customer’s insurance information.

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Access gap

Stef Woods made her first trip to a Washington, D.C.,MinuteClinic when her four-year-old daughter Roya came down with acold. Hoping to get a quick test for strep throat, Woods, alecturer at American University, took Roya to a CVS on a Saturdaymorning, buying her a drink and a coloring book in the store asthey waited.

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“CVS is trying to fill a void,” she said. “There’s such a gap inaccess to care.”

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While the clinics are convenient, there’s evidence that may comeat a cost for the health-care system. According to one study,patients take advantage of the convenience to use more services.Instead of waiting out a cold or the flu, they go see aclinician.

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“In contrast to the people who have said retail clinics wouldreduce health-care spending, we’ve seen it increase health-carespending,” said Ateev Mehrotra, an associate professor at HarvardMedical School.

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The study doesn’t account for the “the long-term benefits ofreceiving preventive care,” CVS spokeswoman Carolyn Castelsaid.

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Clinic nurses try to coordinate with patients’ doctors when theyhave them. If patients don’t have a physician relationship, theclinicians try to connect them with one, said Castel.

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Drawing customers

For now, the clinics likely account for less than 1 percent ofCVS’s annual revenue, estimates Adam Fein, president of PembrokeConsulting, which focuses on drug distribution. The clinics alsodon’t bring in many customers -- only about 1 percent of alldrugstore visits are made primarily to visit a clinic, according toresearch firm Kantar Retail.

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CVS, based in Woonsocket, Rhode Island, doesn’t disclosefinancials for its clinics and declined to comment on theestimates.

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Jeff Goldsmith, who runs the health-care consulting firm HealthFutures Inc., is skeptical of the strategy behind the deal, callingit “flat-out baffling.” He says the MinuteClinics, or what he callsthe “nurse in a broom closet” model, lack the clinical acumen ortrusting relationships with patients to effectively managecare.

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“I don’t see it generating new customers for either the acquireror the acquiree, or leverage to lower health costs,” he said.

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More of the recent growth in “convenient care” has come fromstandalone urgent-care centers. Those facilities, typically staffedby doctors and serving a wider array of illness and injury, areexpanding quickly, as much as 15 percent a year, accordingto Tom Charland, founder of industry tracker MerchantMedicine. Some of the biggest are backed by major corporations,such as UnitedHealth Group Inc.’s MedExpress chain.

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Slower growth

In-store clinics are growing more slowly. CVS has 1,100 out ofabout 2,000 industrywide, according to data from MerchantMedicine.

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CVS’s rivals have stayed back, by comparison. Walgreens BootsAlliance Inc. has about 400 in-store clinics, while Rite Aid Corp.has 43 RediClinics in its pharmacies. Wal-Mart Stores Inc. has morethan 4,600 pharmacies in its stores, but just 19 clinics. Thecompany says it isn’t planning to add more.

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CVS has made deals to transform its business before. In 2007, itacquired prescription benefit manager Caremark. Seven years later,CVS broke ranks with the rest of the drugstore industry and removedtobacco products from its shelves. Today, only 11 percent of CVS’ssales come from non-pharmacy sources, according to Kantar Retailanalyst Brian Owens.

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With Amazon.com Inc. threatening every traditional retailbusiness, including CVS, Owens said now’s the time try somethingnew.

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“They’re already moving away from a drugstore to a health-carecompany,’’ Owens said. “That means they can take risks that otherretailers can’t.’’

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Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.

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