This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Walgreens Bids to Win Health Reform

NEW YORK ( TheStreet) -- Since ending its dispute with ExpressScripts (ESRX) in July, Walgreen (WAG) has been on a tear.

The stock is up over 50% and investors are paying a premium PE of 21.4 for its earnings, or 61 cents in equity for each dollar in sales. By contrast, they pay just 53 cents for each dollar of Wal-Mart (WMT) sales, and 45 cents for each dollar of CVS (CVS) sales.

What's going on? Walgreen is bidding to win health reform.

The American Medical Association has been concerned about the expansion of the company's Take Care Clinics at its Walgreens stores for years, claiming it's an inherent conflict of interest to both prescribe and dispense drugs. But it's really about cutting doctors out of the loop on some of their most lucrative business.

One of the biggest is handling chronic conditions. I have a family history of hypertension and visit my doctor for a half-hour twice a year. He takes my blood pressure, he takes some blood and probably makes $1,000/year off me, most of which comes from my insurance company. Nothing he's doing can't otherwise be done by data and a good nurse. While I like my doctor, I know it's a luxury service.


Walgreens announced last week its clinics will now handle this kind of treatment. The American Academy of Family Physicians opposes this but as a recent U.S. Senate report showed, 57 million Americans already lack access to primary care doctors, and the shortage is only going to grow.

Walgreens can handle more work through a combination of nurses, physicians assistants and data. Doctors become second-line resources, handling only the more difficult questions the clinics aren't qualified to answer.

Walgreens' pharmacy records have expanded through its clinics into sophisticated electronic health records. In addition to its roughly 350 in-store clinics, it has 350 clinics at corporate work sites as well as a program linking hospital patients to the clinics, as Kaiser Health News notes.

This has been a serious problem for years. A study in the American Journal of Managed Care concluded two years ago that clinics can provide equivalent care to a doctor's office for 30%-40% less, and 80% less than an emergency room, which is where many uninsured patients now go.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
WAG $81.65 2.05%
AAPL $128.52 -0.44%
FB $78.78 -1.20%
GOOG $569.27 -0.36%
TSLA $196.80 -0.27%

Markets

DOW 18,153.26 -135.37 -0.74%
S&P 500 2,100.12 -17.27 -0.82%
NASDAQ 4,961.5040 -46.5920 -0.93%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs