I have considered the HI business for myself here in Chicago. Basically, it breaks down to 8 to 12K revenue per patient, with GM in high single digits. Compare this to retail pharmacy where the average rev per script and GM per script is under immense pressure. I had a lady in my pharmacy ask questions about profit and I illustrated the profitabilty example with her scripts, and she understood retail pharma isnt what most think. CVS just buys better and continues to go upstream whereas WAG just sits there waiting. This patient received a letter from CVS stating she would only be allowed at CVS. (remember back when WAG tried to fight CVS), however CVS did not send letters to patients telling them they would be able to go to WAG. I explained the situation that she could go anywhere and was surprised!! I think WAG will continue to take hits, the HI business is not a bad business, it is profitable and I imagine WAG is doing a good job with it (top line and bottom line). HI is an expensive business to get into and this should keep smaller players from getting in for sometime. Total US mkt is somewhere around 10B, and I wouldnt be surprised if WAG makes up 15% or so now. Keep in mind WAG can continue to do this for a long time, its not a company worth investing in, but if you are an employee its good job security. I continue to look at SXCI and ESRX for investments.
Providing Scripts to Nursing homes and Long Term Care Facilities is not a difficult business..However, record keeping is a very important part of this business. It is always under review. Also, additional revenues can be generated from this segment that more than makes up for the lower profits of Rx fills. As for the pharmacist/manager this is a excellent teaching/learning environment. And Rx Tech's play a expanding role here as medical services expand. Now this segment(NH/LTC) has had its problems but it also produced great wealth for some families. Hello D;-)... Meditrust is a past example.
I would think that Walgreens has been in this business for a long time, and having not been able to expand this segment for its pharmacy staff shows the time and money lost in past strategies.