Dive Brief:

• Rite Aid is the latest pharmacy giant to step into clinical care delivery through a new partnership with rural home care startup Homeward.
• Under the deal announced Tuesday, Rite Aid pharmacists will direct eligible customers to Homeward's clinical services, including annual wellness visits, health screenings, diagnostic testing, virtual visits and in-home care. Homeward will also be able to park its mobile clinician units at Rite Aid's rural locations, with the goal of allowing senior customers to see a provider and pick up their prescriptions in one visit.
• Homeward will provide in-network services, including specialty care beginning with cardiology, in the third quarter this year for patients covered by Medicare and Medicare Advantage plans. The companies are starting the partnership in Michigan, with the opportunity to expand to Rite Aid's 700 rural locations across the U.S. over time.

Dive Insight:

In a call with investors in April, CEO Heyward Donigan said Rite Aid's growth strategy is to double down on pharmacy services, especially focused on leveraging its scale and pharmacy expertise to improve care access and outcomes in underserved and rural communities.

Though one in five Americans live in rural areas, fewer than 10% of doctors practice there, resulting in higher costs and poorer clinical outcomes. By one estimate, rural Americans have a 23% higher mortality rate than those living in urban areas.

Hospital closures and physicians shortages have only been exacerbated by the pandemic, especially in rural areas, which could worsen that divide.

"We believe that supporting these unmet needs presents tremendous opportunity for us, and the price of entry for us is very low," Donigan said.

The new Homeward partnership is Rite Aid's first effort to bring clinical services to its stores, following in the tracks of drugstore rivals like CVS Health and Walgreens, which have raced to build out their care delivery networks to bring in more revenue from a larger slice of the patient journey.

CVS plans to add a few hundred primary care centers — which would include physicians — to its network of MinuteClinics, drugstores and health-focused HealthHUB locations launched a few years ago. Meanwhile, Walgreens is investing billions in value-based provider network VillageMD to accelerate the opening of their co-branded medical clinics, and Walmart has partnered with primary care startup Oak Street Health to bring its value-based clinics to Walmart supercenters.

Rite Aid is also going down the partnership track with Homeward, which was launched in May to try and improve healthcare for the some-60 million Americans living in rural communities.

Homeward, which takes on full risk for its members, relies on an integrated care model combining mobile, home-based or virtual care with centralized clinical oversight and care management.

Rite Aid did not respond to multiple requests for comment on the financial terms of the partnership.