Walgreens closing all VillageMD primary care clinics in Florida

Walgreens-backed VillageMD is closing all its medical clinics in Florida, one of its biggest markets. Business Insider first reported the news.

Citing a January report by investment firm Jefferies, the report noted that Walgreens has more than 50 locations in Florida, making the state its third-largest market behind Texas and Arizona. 

A VillageMD spokesperson told Drug Store News, “To continue to scale our care delivery services and value-based care model, we assess and evaluate our progress on an ongoing basis and refine our approach as we grow, similar to most growth-oriented companies.  Strategically, we are focused on geographic density in markets and locations where we can serve patients to our standards of quality care." 

The spokesperson continued, "As a leader in value-based primary care, we remain steadfast in our mission to transform the way health care is delivered in the United States. We know this is a challenging time in health care with more than 90% of the US’ $4.1 trillion in healthcare expenditures being spent on patients with chronic or mental health conditions, while at the same time facing physician shortages and burnout. We are exiting the Florida market and our patients always remain the top priority. We are supporting our patients during this transition including giving them resources of where they can receive care, access their medical records and answer their questions." 

In October, Walgreens said it planned to close 60 VillageMD locations in nonstrategic markets as part of its cost-cutting efforts. In a January earnings call, Walgreens' new CEO Tim Wentworth said the company had completed nearly half of those closures, the report noted.

[Read more: Walgreens making major investment in VillageMD]

All of the VillageMD clinics in Florida are co-located in Walgreens stores, according to Jefferies' January report. Jefferies analysts Brian Tanquilut and Jack Slevin said that those co-located clinics are small and likely had a difficult time recruiting enough doctors and attracting enough patients. "If you're co-locating with a retail pharmacy it's probably too small of a clinic to get the scale needed to make it work, to get the center-level economics to click," Tanquilut said, per the report.