Walgreens and VillageMD havetested their primary care model by opening five in-store clinics inthe Houston area in November. (Photo: KenWolter/Shutterstock)

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There will soon be a doctor in the house at Walgreens.

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The pharmacy chain has struck a deal with VillageMD to haveprimary care clinics in 500 to 700 of its stores over the next fiveyears, CNBC reports. As part of the deal, Walgreenswill invest $1 billion in equity and convertible debt in VillageMDover the next three years, including a just-completed $250 millionequity investment.

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VillageMD will run and staff the clinics. The primary careprovider will also recruit employees and pay their salaries, aswell as paying Walgreens to use the space.

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Patients will be able to visit the clinics for servicesincluding annual check-ups and walk-in appointments. Each clinicwill have nine exam rooms, a waiting area, and a four-personphysician-led staff who will coordinate with pharmacists in thestore. Home visits and telemedicine will also be available.

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Existing areas of the drugstores will be converted into clinics.Most clinics will be close to 3,300 square feet, but some will beas large as 9,000 feet.

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Walgreens and VillageMD have tested their primary care model byopening five in-store clinics in the Houston area in November.Based on positive reviews from patients, the decision was made toscale up.

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VillageMD CEO Tim Barry told CNBC that because Walgreens arelocated near people's homes, patients will be more likely to see adoctor regularly or get medical matters checked out sooner.

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The plan is for more than 50% of the new clinics to open inareas with shortages of health professionals. Barry saidopening in those locations will help VillageMD reach "older, sickerand poorer populations" that are often underserved.

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Walgreens co-Chief Operating Officer Alex Gourlay agreed. "Wewant to be everywhere in America where people need health care," hesaid. "That's always been our position and always will be."

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Walgreens isn't the only company expanding into health care,however. Walmart has opened four primary care clinics calledWalmart Health, offering its signature upfront pricing and lowcosts. CVS Health has acquired Aetna and plans to open 1,500 storesfeaturing clinics and wellness rooms by the end of 2021. Gourlaytold CNBC that with 6 in 10 Americans living with at least onechronic condition requiring daily medication, there's more thanenough demand to go around.

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VillageMD says its clinics will accept different kinds of healthinsurance, often with copays of up to $10. People can also pay outof pocket, and there will be a sliding scale for those withoutinsurance to help make care affordable.

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Richard Binder

Richard Binder, based in New York, is part of the social media team at ALM. He is also a 2014 recipient of the ASPBE Award for Excellence in the Humorous/Fun Department.