Walgreens, Microsoft Ink Strategic Deal to “Transform Healthcare Delivery”

Jan. 15, 2019
Walgreens Boots Alliance Inc. and Microsoft Corp. are joining forces on a major seven-year healthcare partnership that will aim to make healthcare delivery more personal, affordable and accessible.

Walgreens Boots Alliance Inc. and Microsoft Corp. are joining forces on a major seven-year healthcare partnership that will aim to “deliver innovative platforms that enable next-generation health networks, integrated digital-physical experiences and care management solutions.”

The companies announced today that they will combine the power of Microsoft Azure, Microsoft’s cloud and AI (artificial intelligence) platform, healthcare investments, and new retail solutions with WBA’s customer reach, volume of locations, and outpatient healthcare services to accomplish their goals: to make healthcare delivery more personal, affordable and accessible.

While innovation in healthcare has occurred in pockets, officials of the two companies believe that “there is both a need and an opportunity to fully integrate the system, ultimately making healthcare more convenient to people through data-driven insights.”

As part of the strategic partnership, the companies have committed to a multiyear research and development (R&D) investment to build healthcare solutions, improve health outcomes and lower the cost of care. This investment will include funding, subject-matter experts, technology and tools, officials noted in the announcement. The companies will also explore the potential to establish joint innovation centers in key markets. Additionally, this year, WBA will pilot up to 12 store-in-store “digital health corners” aimed at the merchandising and sale of select healthcare-related hardware and devices.

Executives noted that the companies will focus on connecting WBA stores and health information systems to people wherever they are through their digital devices. What’s more, the integration of information will enable valuable insights based on data science and AI that can allow for improvements such as supporting the transition of healthcare data into more community-based locations and sustainable transformation in healthcare delivery.

And by working with patients’ healthcare providers, the companies will look to proactively engage their patients to improve medication adherence, reduce emergency room visits and decrease hospital readmissions. Core to this model is data privacy, security and consent, which will be key design principles, officials stated.

Just last month, Walgreens Boots Alliance announced that it would work with Verily, an Alphabet company, to develop a medication adherence pilot project. Industry observers are already attesting that the Walgreens-Microsoft collaboration is an obvious sign that the two companies are trying to counter Amazon's growing healthcare footprint.

“Improving health outcomes while lowering the cost of care is a complex challenge that requires broad collaboration and strong partnership between the healthcare and tech industries,” Satya Nadella, CEO, Microsoft, said in a statement today. “Together with Walgreens Boots Alliance, we aim to deliver on this promise by putting people at the center of their health and wellness, combining the power of the Azure cloud and AI technology and Microsoft 365 with Walgreens Boots Alliance’s deep expertise and commitment to helping communities around the world lead healthier and happier lives.”

Notably, the companies will also work on building an ecosystem of participating organizations to better connect consumers, providers—including Walgreens and Boots pharmacists—so that major healthcare delivery network participation will provide the opportunity for people to seamlessly engage in WBA healthcare solutions and acute care providers all within a single platform.

In an emailed statement reacting to today’s news, Forrester analyst Arielle Trzcinski noted, “The technology focus will enable Walgreens to put in place a critical backbone to enable a more connected experience for the customer/patient, as well as support broader interoperability.”

And speaking to the difference between retail pharmacies and traditional care providers, Trzcinski said that retail pharmacies offer an opportunity to engage with the patient much more frequently than at an office visit, giving an example of how chronic care patients see their pharmacist frequently, while some figures indicate that the average diabetic patient sees his or her provider once every six months.

“This gap creates an opportunity for the pharmacist to help monitor the patients’ health and prompt the patient to receive preventative care in the retail clinic or through a virtual care visit. Using an enterprise health cloud, like Azure, you create a more connected ecosystem so that we can share that data with the patient’s additional providers, track outcomes, and intervene earlier when an issue arises,” she said.

Trzcinski also pointed out that up to 20 percent of hospitals are at risk for closure in 2019—according to Morgan Stanley—with most of them located in rural areas. “Consumers will turn to retail locations like Walgreens, Walmart, and CVS for convenient care options as well as virtual care delivery to fill the gap,” she asserted.

Through this agreement, Microsoft becomes WBA’s strategic cloud provider, and WBA plans to migrate the majority of the company’s IT infrastructure onto Microsoft Azure, officials said. Microsoft also plans to roll out Microsoft 365 to more than 380,000 Walgreens employees and stores globally.

 “WBA will work with Microsoft to harness the information that exists between payors and healthcare providers to leverage, in the interest of patients and with their consent, our extraordinary network of accessible and convenient locations to deliver new innovations, greater value and better health outcomes in health care systems across the world,” said Stefano Pessina, executive vice chairman and chief executive officer of WBA.

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