Colleen Lindholz, president of Kroger Health, spoke about the grocery store’s plans to expand further into healthcare.
Cincinnati-based grocery and retail giant Kroger Co. has ambitions to continue its mission of expanding healthcare, according to Colleen Lindholz, president of Kroger Health.
Kroger is one of the nation’s largest grocery and retail companies, with approximately 2,300 pharmacies and 221 retail clinics, giving it a significant footprint to compete in healthcare. Lindholz has been with the company for over two decades and has helped shape its business strategy focused on health and wellness.
“Our vision is to help people live healthier lives, and our mission statement says we will simplify healthcare by creating solutions that combine health, wellness and nutrition to connect with people on a personal level, ”Lindholz said. Health leaders.
From Lindholz’s perspective, there are several opportunities for Kroger to grow in the healthcare field, including improving the delivery of prescription drugs in a way that benefits consumers and focuses on promoting “health.” food as medicine ”. However, she also spoke of the lingering challenges facing Kroger, including industry consolidation, difficult negotiations with pharmacy benefit managers (PBMs), and rising direct and indirect compensation costs (DIR).
Below are some takeaways from Lindholz about what’s in store for Kroger in healthcare.
Maneuver PBMs and DIR fees
Lindholz said Kroger, like other healthcare players, is under the pressures produced by widespread vertical integration and consolidation. Kroger’s strategy to get prescriptions into its stores has been affected by the fact that it contracts with several PBMs, the major ones belonging to large health plans.
“We are seeing a lot of pressure around refunds and DIR fees, which are getting out of hand,” Lindholz said. “I know there is activity in Washington right now with a call for reform of the DIR and where most of the cost reduction should be.”
Lindholz added that Kroger remains a supporter of the concept of DIR fees, citing the purpose of their initial creation as a way to provide better quality patient care.
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“However, we are affected by DIR fees that are 300% higher than in 2016,” said Lindholz.
PBMs also compound the problem for Kroger, according to Lindholz, as they act as a negotiator with drugmakers, but ultimately set the standards for how discounts are passed on to pharmacies.
“The way they measure us and the way we compete to grab those discounts, where 2,300 pharmacies are compared to an independent that has five pharmacies, is insane,” Lindholz said. “I think the way they measure everything is for their benefit, not necessarily for the benefit of the patient. We want the lowest cost to be at the point of sale where the patient is actually located.”
“Food as medicine”
A key part of tackling chronic disease is addressing what people eat, Lindholz said. Kroger launched its free “OptUp” app with the goal of correcting some of the fundamental issues that contribute to chronic disease.
In 2017, Kroger conducted a study to analyze A1Cs, 90-day average blood sugar, and blood pressure in employees with diabetes and leverage nutritional science to help them make food purchasing decisions.
Kroger was so encouraged by the study results that he asked the company’s nutrition and technology experts to design a Kroger loyalty card-driven app as a way to “simplify customer capacity. from Kroger to buy healthier food “.
“The results were so statistically significant that we decided to bring the app to market because we believe that over time it can support behavior change,” said Lindholz. “What we’re trying to do is be in the prevention space, particularly around diabetes, where we help our diabetics make the food choices they critically need in order to avoid moving forward with it. their illness and switch from two oral medications to insulin. “
A spokesperson for Kroger said the company will roll out an update to the app soon to allow customers to shop for healthier foods, even if they don’t shop at Kroger.
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Lindholz also commented that healthcare is a fragmented industry, citing the lack of communication between different electronic medical record (EMR) systems.
Lindholz said the company is looking to create a solution to foster a better line of communication with systems running on Epic and Cerner.
“We’re building a platform that we can see across all of our pharmacies and connect with the top 17 EMRs across the country,” Lindholz said. “It is important in our quest to move towards the triple bottom line and reduce some of this fragmentation while closing the gaps in care.”
“One of the unique pieces of this new platform is that this will be the first time someone has included a food score. We will be testing in Cincinnati with a cardiologist and an endocrinologist to see how clients are eating, if we can. help change their behavior, and will their overall results be better over time? “
Fighting prescription drug prices
Given Lindholz’s experience as a pharmacist, it’s no surprise that one of her main initiatives at Kroger has been to improve the availability and affordability of prescription drugs for customers. To that end, Lindholz noted that Kroger currently has three central dispensing facilities across the country that fill prescriptions overnight so Kroger can have the lowest cost to fill.
“This allows us to spend more time with the patients who are in the store and to provide the highest quality care possible at the lowest cost,” said Lindholz. “We do a lot more of one-on-one counseling with clients, both over the counter and through a center of excellence that we have. We are up 320% in clinical interventions compared to a year ago and this is due to we are putting in place a system that queues pharmacists the moment they are with patients at the store or through our call center. “
Kroger also launched a pharmacy savings club in partnership with GoodRx last December to help customers facing high prices and limited access to prescription drugs.
“What this club does is it brings transparency and pricing right to the customer. It costs $ 36 for an individual, $ 72 for a family, and we’re making significant savings for the consumer,” said Lindholz. “What we do with the savings club is cut out the middleman. We take any discounts that we would get from the manufacturers and pass them directly to our customers, saving them a lot of money.”
Correction: An earlier version of this story stated that Kroger’s OptUp app specifically measured A1C and blood pressure. The app was based on a study of employees with diabetes and now helps all customers buy healthier foods. This story has been updated to reflect this.
Jack O’Brien is the Content Team Leader and Financial Editor at HealthLeaders, an HCPro brand.
Photo credit: FRANKLIN, TN-OCTOBER 2015: Sign for a Kroger supermarket pharmacy. Kroger pharmacies have been on a growth trajectory and there are now over 2,100 Kroger pharmacies across the United States. – Image / Editorial Credit: James R. Martin / Shutterstock.com